Do you find pensions and insurance complicated? Things to consider as an employer.

Do you find pensions and insurance complicated? Things to consider as an employer


Sometimes employers ask us about pensions and insurance for their employees. The answers often vary depending on what collective agreement they have or whether the company does not have a collective agreement linked to the business and uses other insurance solutions instead. Here we run through some things to keep in mind.

If a company is bound by a collective agreement, as an employer you must take out insurance policies for your employees. If a company does not have a collective agreement, it does not have to take out corresponding insurance. In some cases, however, a company without a collective agreement may be required to take out equivalent collectively agreed insurance depending on the industry in which it operates, such as the construction industry.

With regard to private companies, insurance policies may differ for manual and non-manual workers. This is partly due to the insurer but also the content of the insurance. It is the employer who must apply for insurance from the relevant insurance companies who manage the insurance policies.

If we look at private companies in general, many of them have the following policies depending on whether collective agreements apply within the company, but that is not to say that this is the case in your particular workplace.

Contractual pensions

A contractual pension is an occupational pension that is primarily agreed through a collective agreement between employer and employee representatives. As there are many different collective agreements, there are also a number of variants when it comes to contractual pensions. For example, there is an ITP pension for non-manual workers and SAF-LO pensions for manual workers in the private sector. There are also other solutions for those working in municipal, regional and national government. You can offer your employees an occupational pension without being bound by a collective agreement. These solutions may look slightly different, depending on the provider used.

Employment transition insurance

In the event that an employee is made redundant, they may be able to benefit from employment transition insurance, which also includes a one-off severance payment (AGB) and severance pay (AGE). This insurance is taken out from Fora and managed by AFA and TRR. The ability to benefit from the insurance depends on the terms and conditions of the policy with factors such as age, employment history, form of employment and reason for termination of employment affecting the right to the insurance. Both AGB and AGE enable the employee to receive compensation after their employment is terminated.

In brief, employment transition insurance aims to help people who are made redundant to find work more quickly than if they were to use the Swedish Public Employment Service alone. Manual workers who go via the TSL transition insurance (Trygghetsfonden) are assigned a representative who will assist with the transition so that the individual finds work more quickly. Non-manual workers usually go to TRR (Trygghetsrådet), which helps clerical workers find work again more quickly. However, non-manual workers may request a different body than TRR.

It is possible for companies without collective agreements to arrange equivalent transition support for employees in the form of help in the labour market. Many of the bodies that help via collectively agreed insurance are also able to help companies without a collective agreement.

Occupational injury insurance (TFA)

Occupational injury insurance is more comprehensive than social insurance and applies to all workers, irrespective of their occupational category. Not only is the employee insured during their working hours, but also on their way to and from work. The insurance may also cover employees who fall sick as a result of their work or who have an illness that is made worse due to their work. If the employee loses income due to injury, they may receive compensation of up to 100% of their income and the insurance may provide compensation for costs incurred in connection with the injury.

Group sickness insurance (AGS) and group life insurance (TGL)

AGS applies to workers and enhances the compensation they receive from Försäkringskassan, the government body that administers social insurance, in the event of sickness, from day 15 at the earliest. Some contracts and agreements may have different rules which require the employer to bear the cost of sick pay before and after the first 14 days. TGL is for non-manual workers and is part of the ITP plan taken out via Collectum. The insurance is valid for the duration of the individual’s employment and gives the family a one-off payment if the employee passes away before they retire.

Companies without collective agreements

Of course, insurance policies can be taken out without collective agreements, and this includes occupational pension insurance. Many companies use the framework for ITP, for example, when they take out insurance and make provisions for other, similar pension solutions. As it is voluntary for companies without collective agreements to take out insurance, unfortunately around half of these companies have no occupational pensions.

How Azets can help you

At Azets, we have extensive experience of insurance policies, both within and outside of collective agreements. If you as an employer have questions or concerns about this or would like to hear about common solutions in your particular industry, please don’t hesitate to get in touch.

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