ITP 2 Retirement pension and ITPK
From the age of 28, your employer begins paying in contributions to your retirement pension.
Your retirement pension is comprised of two components
- The majority is comprised of a defined benefit ITP 2 Retirement pension.
- Each month, your employer also pays funds into your defined-contribution ITPK plan.
These contributions continue for as long as you are employed by your employer, or to the age of 65. If you continue to work after this point in time, you can come to an agreement with your employer stipulating that they continue to pay into your ITP 1 Retirement Pension after you have turned 65.
How much ITP 2 Retirement pension will I receive?
The amount you receive once you retire depends on factors, such as:
- your salary when you retire
- how long you have paid into your pension plan
- when you start to take out your pension benefits, and for what period of time
- the income base amount.
ITP 2 RETIREMENT PENSION FROM ALECTA
|Your annual income||Retirement pension|
|Salary up to SEK 501,000||10 %|
|Portion of salary between SEK 501,000 - 1,336,000||65 %|
|Portion of salary between SEK 1,336,000 - 2,004,000||32,5 %|
To receive ITP 2 Retirement pension as specified in the table, you must:
- be in employment with ITP 2 until you reach the age of 65
- have had ITP 2, or certain other occupational pensions, for at least 30 years (360 months). For each missing month, your pension decreases by 1/360th.
If you are expected to work for less time, the amount decreases.
EXAMPLE — ANDERS RECEIVES 10 PER CENT OF HIS SALARY
Anders’s annual income is SEK 385,600 and he has worked for over 30 years. He will, therefore, receive 10% of his salary in ITP 2 Retirement pension benefits:
10 per cent x SEK 385,600 / 12 months = Anders receives SEK 3,213 per month in ITP 2 Retirement pension benefits, before tax, for the rest of his life.
EXAMPLE — PIA RECEIVES 10 PER CENT AND 65 PER CENT, RESPECTIVELY, OF HER SALARY
Pia’s annual income is SEK 632,100 and she has worked for over 30 years. She will, therefore, receive 10% of her salary up to SEK 501,000, and 65% on the salary portions over this amount.
10 per cent x SEK 501,000 / 12 months = SEK 4,175/month
65 per cent x (SEK 632,100 - SEK 501,000) / 12 months = SEK 7,101/month
Pia receives SEK 11,276 per month (SEK 4,175 + SEK 7,101) in ITP 2 Retirement pension benefits, before tax, for the rest of her life.
ITPK — an extra retirement pension
ITPK is an extra retirement pension. Your employer contributes 2% of your salary to ITPK every month. If you choose Alecta for your ITPK, we invest your pension in Alecta Optimal Pension.
The size of your ITPK
The size of your ITPK depends on:
- your salary
- how the funds in your pension grow, e.g. the return you receive on your pension capital
- the amount of fees you pay to the company taking care of your pension
- when you start to take out your pension benefits, and for what period of time.
How your ITPK pension is invested
Choosing Alecta for your ITPK will make your saving affordable, secure and simple. The occupational pension is a complete package and you do not actually need to do anything at all unless you want to. Your pension is automatically placed in Alecta Optimal Pension, but you can choose another savings portfolio if you wish.
In 1990, it became possible for you to select where to invest your ITPK yourself. If you did not select anything, your premiums were invested in what is known as an original ITPK up until 2007. Today’s ITPK products are expected to give a better return on capital and it is, therefore, possible to transfer your entire original ITPK pension capital, for example, to Alecta Optimal Pension.
Payment of your retirement pension
The retirement age for ITP 2 Retirement pensions and ITPK is 65 years, but you can start to take out your pension sooner or later if you wish. Generally, the pension is paid out for the rest of your life. You know how much you will receive for the rest of your life. You may also choose to take out your retirement pension over a specific number of years instead.