pension system, from 2001, there is a positive real growth increment to pensions claimed both under the old and the new rules. When real covered wages grow by more than 1.6 percent, the difference gives rise to real indexation of benefits equal to the difference between 1.6 and the actual rate of growth of the per capita (covered) wage - in addition to normal price indexation.<sup>13</sup> This still falls short of full wage indexation, however.

For all persons 65 and older earnings and entrepreneurial income constitute about 6 percent, capital income 12 percent, pensions 78 percent and housing allowances about 4 percent of total income.<sup>14</sup> Earnings and entrepreneurial income, not surprisingly, are more important for younger pensioners. They constitute about 15 percent of total income for persons 65-69 years old, with a steeply declining profile thereafter. As people age and the importance of earnings decreases, pensions and capital income become the main sources of income.

Table 6 provides data on the distribution of individuals’ pension income between public, occupational and voluntary insurance. Table B5 in the Statistical Appendix includes more detailed information, including data broken down by gender. From the data in Table 6, it is possible to calculate that the public pension constitutes 71 percent, the occupational pension 23 percent and the income from private individual insurance 6 percent of the average pension income.

**Table 6.  Composition of Old Age Pensions 2004**

||All|<br>Average<br>|Of which||||||||
|---|---|---|---|---|---|---|---|---|---|---|
||persons|amount|||||||||
||<br>with some|1000|Public old age|pension|||Contractual ben|efit|||
||form of|SEK|||With|a guarantee<br>|||Private in|dividual|
||pension|||||benefit<sup>**1**</sup>|||pensions||
|Age|||Number|Average<br>amount<br>1000<br>SEK|Number|Average<br>amount<br>1000 SEK|Number|Average<br>amount<br>1000 SEK|Number|Average<br>amount<br>1000 SEK|
|**All**|1 863 855|135.5|1 571 252|113.8|1 563 149|112.1|1 461 832|40.4|<br>370 547|40.1|
|55-60|143 788|58.6|0|0|0|0.0|110 588|59.4|<br>50 291|36.8|
|61-64|178 470|105.0|36 207|63.1|28 569|55.0|137 264|100.6|<br>55 825|47.6|
|65-69|404 411|167.8|397 646|118.0|397 442|111.0|358 079|42.8|<br>150 624|37.3|
|70-74|345 153|1563|345 128|125.1|345 128|125.1|288 900|28.7|<br>59 959|41.5|
|75-79|312 167|140.9|312 154|117.5|312 154|117.5|242 082|25.8|<br>25 047|41.6|
|80-84|264 352|130.0|264 349|108.9|264 349|108.9|189 950|25.9|<br>15 840|42.5|
|85-89|143 187|122.3|143 183|101.3|143 183|101.3|94 249|27.9|<br>8 764|42.9|
|90-|72 327|107.6|72 324|88.6|72 324|88.6|40 720|29.8|<br>4 197|37.9|

Source. Statistics Sweden.

The data in Table 6 also suggest that the different sources of benefits fulfill different needs. First, six percent of all beneficiaries in 2004 were under the minimum age (61) to claim a public benefit. Their benefits consisted of either an occupational pension, a private individual pension or in some – surprisingly few - cases both. In many cases, employees obtain occupational benefits as a form of severance pay, which does not prohibit them from taking

> 13 Recall that the NDC benefit is frontloaded with growth of 1.6 % from the time it is issued. The mechanism described here corrects for the difference between 1.6 and the actual oucome. 14 Statistics Sweden (2004).

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