SWEDEN - The surplus in the pensions system has fallen to Skr 9bn (e983m) in 2004 from Skr 58bn in 2003, according to Swedish National Social Insurance Board's annual report.
The dip in surplus has affected the balance ratio which fell to 1.0014 in 2004 from 1.01 in the previous year.
Gudrun Ehnsson, staff adviser at the board, said that a balance ratio of 1.0014 was equivalent to a consolidation ratio just abover 100% in a funded system.
The balance ratio measures the financial position of the pension system and shows the relationship between the system’s assets and liabilities.
If liabilities exceed assets, the ratio is less than 1 triggering the balancing mechanism, resulting in pensions that will be indexed at a lower rate than with a balance ratio above 1.
Assets, which consist of the buffer funds and the contribution asset, totaled Skr 6,253bn, exceeding liabilities by Skr 9bn.
Assets increased during the year by Skr 211bn, while liabilities rose by Skr260bn.
“The annual report of the pension system is a good reflection of the economic and demographic conditions that govern society’s capacity to provide its members with an economically and socially sustainable system of pension insurance,” the board noted.
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