The Swedish Trade Union Confederation (LO) has terminated its collective insurance agreements to pressure employers into extending pension and redundancy coverage to age 67. This strategic move is designed to eliminate gaps in the security system created by the increase in the target retirement age, which now stands at 67 while occupational pensions are only paid until age 65.
Simon Peterson, a contract secretary at IF Metall, described the move as a high game
because of the large sums of money involved. He stated that the termination is necessary to free the union from the peace obligation during contract periods, thereby forcing employers to the negotiating table.
Closing the Insurance Gap
Currently, employer-paid occupational pensions and redundancy payments only cover workers up to the age of 65. LO is seeking to align these benefits with the target retirement age of 67. The union is also pushing to lower the entry age for these payments, as many workers in manual trades begin their careers before the current threshold of 22.
The necessity of these changes was highlighted by the experiences of Hans Jansson and Leif Andersson. Both men became unemployed after their employer shut down operations after they had passed age 65. Consequently, they were denied the redundancy grants and transition support available to younger unemployed workers. Jansson argued in an interview with Dagens Arbete that if people are healthy enough to work longer, all insurance and benefits should follow them up to the target age.
Potential for Industrial Action
If an agreement is not reached by December 1, 2026, there will be no insurance agreement between the unions and employers, which could lead to the cessation of occupational pension payments. Currently, employers contribute 4.5 percent of salaries to these pensions.
Peterson warned that without an agreement in place, there is no peace obligation, and the union will take industrial action if necessary
to secure the terms. When asked by Dagens Arbete why they have rejected the union’s requests and how far they would go to avoid a conflict, Svenskt Näringsliv declined to comment, citing ongoing negotiations.
