By Patrick Anderson

ISBN-10: 9264199969

ISBN-13: 9789264199965

Publication through Anderson, Patrick

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The second reason is that entitlements are based on actuarial calculations, which penalise or favour people that withdraw early or later, respectively. The third reason is that the retirement decision and how pensions can be drawn are much more flexible compared to the old system. e. the ratio of pension entitlements to income from work prior to retiring) are likely to be lower in the new system compared to the old one because entitlements are now based on lifetime earnings, life 8. e. 25% and 78% of the labour force has a pensionable income.

This lowers of course unemployment, but more important it results in a permanent decrease in employment rates for older people. Nevertheless, unemployment rates remain high for the oldest age group (persons aged 60-64). Since older people have larger difficulties than younger people in finding a new job after becoming unemployed, older workers who lose their jobs are more likely to become trapped in long-term unemployment. Long-term unemployment Generally, older workers appear to be less employable than prime age workers (see Chapter 4).

Different ways to withdraw from the labour market in Sweden for workers aged 60-64 years, 1999 Men % Women 30 25 20 15 10 5 0 Disability pension Occupational pension Long-term sickness Unemployment Old-age pension Other ways Source: National Social Insurance Board (2002). Larger pressure on the welfare system in the future In the future, there will be even greater pressure on the social security system since occupational pensions are likely to become a less attractive path to early retirement. Under the new pension system, pension entitlements will be based on lifetime earnings and so early retirement through an occupational pension plan will result in a lower public pension since occupational pensions do not generate any additional entitlements.

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