The Swedish Riksdag voted last month in favour of the new pensions system. The outcome of the vote was expected as five parties have agreed upon the details before put-ting the proposition to a vote.

The new system will be partly PAYG and partly funded. Of all taxable income, 18.5% will be paid to the new system and 16% will finance the PAYG system and the remaining 2.5% will be funded. Each individual having earn-ed pension rights will be asked to choose at least one mutual funds from a very wide range of fund managers participating in the system.

The funded system will be administered by a new Premium Pensions Authority, PPM a state-owned unit link life office. The PPM will invest the premiums of the individuals choosing and will also take care of the daily trading as it will be possible to switch funds continuously. The first challenge for the new authority will be late 1999 or early 2000 when the first Skr34bn ($4.4bn) flood comes in from the National Debt Office to the selected mutual funds. The annual premiums after the first year are calculated to exceed Skr 16bn. Mikael Nyman

Topics