Pensions: Italy and Sweden compared on the contributory system

Italy and Sweden, two countries so far but very close with regard to the social security system. In fact, they both started the first in Europe contributory system but with some substantial differences.
In Italy the application of contributory system it has been very gradual so that today the pensions are calculated with the mixed method, while in Sweden the conditions have been created to leave immediately, so that the Swedish pension model is taken as an example throughout Europe.

How the pension works in Sweden

The Swedish social security system is a system with pay-as-you-go financial management, in which the pensions are paid with the contributions paid by the workers and are calculated, as mentioned, with the contributory method, or the amount is in function contributions paid by the workers, the rate of revaluation of the payments and an actuarial coefficient, which converts the capital into income based on age, regulatory, demographic and economic factors.
As for lRetirement age, a form of flexible retirement is envisaged starting at the age of 61 or continuing to work up to 67 if the employer allows it.

There national pension, guaranteed to all, is calculated on the basis of the contributions paid with a rate of 18.5%. Based on the contributory method, this pension guarantees an average amount of 55-60% of earned income.

The social security gap is integrated with two other pension forms: the occupational pension provision, which provides for contributions paid by employers, based on agreements that depend on the different work sectors, and the private pension provision, that the State incentives with tax advantages, because it is conceived as an integral part of the pension system.

The Italian contributory system

Stefano Gronchi, economist who in 1995 was a consultant to the Dini government for the contributory reform, su lavoce.info describes the Italian genesis of the social security system by identifying how, unlike Sweden where the technicians worked, politics in Italy has put itself in the way of reform.

In times of consultation, the unions' prior assent was requested, which arrived after a three-day conclave. A technical table was then set up which I was asked to attend. Urged by the political forces interested in returning to the polls without the electoral discomfort of pensions, the contribution project was prepared in a few weeks, but its quality was commensurate with the time spent.
Many of the writer's recommendations were considered "difficult to explain" or "politically inappropriate". Yet all became fundamental chapters of the next Swedish reform ".

What has been said by Gronchi shows how, in our country, the interventions were held back by the fear that they had too high political costs, while in Sweden the policy let the technicians work. Read about it: The pensions of Italians are at risk: nobody tells the truth