Mårten Palme in DN Debatt: ”The proposal is poorly thought through”
The government wants to introduce a so-called gas mechanism in the pension system. ”The term gas creates a misleading rhetorical illusion that it can only be designed in one specific way,” write Mårten Palme and John Hassler, both professors of economics at Stockholm University, in DN Debatt.
Mårten Palme, Professor of Economics at Stockholm University. Photo: Johanna Säll
In October, the government sent out a proposal to introduce a gas mechanism in the pension system. The proposal means that money would be paid out to pensioners and pension savers when the system’s assets are deemed to be greater than its liabilities.
Carefully consider and thoroughly investigate major changes to the pension system before implementing them
Four economists are now responding to the proposal in DN Debatt. According to them, the proposal is poorly substantiated and creates a misleading picture of how the pension system’s finances work. The so-called surplus is largely based on estimated future contributions, which makes it uncertain how much money is actually available for distribution.
The authors also point out that the system’s balance mechanism is primarily designed to warn about deficits – not to signal when there is room for extra payouts. They specifically urge policymakers to return to the principle established in the reform of the 1990s:
”Do as your predecessors did. Carefully consider and thoroughly investigate major changes to the pension system before implementing them.”
In addition to Mårten Palme and John Hassler, the article is written by Ossian Ekdahl and Ole Settergren.
