Our role in the pensions system

The Swedish pensions system can be likened to a pyramid divided into three parts: retirement pension, occupational pension and private pension. We are primarily concerned with occupational pensions but can be chosen for other kinds of pension.

Retirement pension

A retirement pension in Sweden has three components: income pension, premium pension and guarantee pension.

Premium pension is the part which individuals can decide upon themselves. Individuals are free to choose which funds it is invested in, for example, in one of the four ethical KPA funds.

Occupational pension

Occupational pensions are regulated by collective agreements between employers and unions. Our main pension agreement is KAP-KL/AKAP-KL, a scheme which covers over one million local government employees. This agreement has a number of benefits for both employees and their families:

  • Premium-based retirement pension
  • Defined benefit retirement pension
  • A pension for their family if they die

Every employee has the right to the premium-based retirement pension. Every year, employers pay in an amount equivalent to 4.5% of salary which the employees may themselves invest in either traditional pension insurance or a fund (unit-linked) pension scheme. We are the so-called default alternative for this part of the occupational pension. This means that employers and unions have agreed to invest with us the occupational pensions of those who have traditional pension insurance with guaranteed repayment but who do not actively make some other choice.

Private pension savings

KPA Pension does  not provide products for private pension savings.