Ageing, with increases in the old-age dependency ratio, puts a strain on pension systems organised as a pay-as-you-go system. The major part of the Swedish pension system is a pay-as-you-go one, but the specific Swedish design mitigates much of this strain. It is maintained to be financially stable. The question asked in this chapter is whether the system will be politically as well as financially stable in the future. The design is described and analysed with respect to sustainability.

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... l sustainability is analysed from the viewpoint of fairness, assuming that a fair system will be more stable than a system that is perceived not to be fair. The analysis of fairness is divided into fair outcome and fair procedure. Outcome varies much with chosen measure. The procedure has it draw-backs, but seems fair enough provided a well-functioning labour market.