For some employment terms, it is possible to find personalised solutions through individual agreements.

The reason for individual agreements

For Mid Sweden University, it is important to be able to offer attractive employment terms. Increased competition over qualified workers due in part to generational change and increased movement on the job market demands attractive workplaces. Apart from, for example, duties, work environment and development opportunities, salary and other employment terms are of great significance in this context. It may therefore give Mid Sweden University a competitive advantage to be able to offer suitable employment terms to employees. 

What is an individual agreement?

An employee's entitlement to collectively agreed benefits is based on the individual employment contract. The contract binds the employer and employee to the benefits that have been established through collective agreements. For some employment terms, it is possible to find personalised solutions through individual agreements. All individual agreements have the following in common (General agreement on salaries and benefits – Villkorsavtal/Villkorsavtal-T – Chapter 2, Section 7): 

  • The agreement must always be made in writing
  • The employer must inform the relevant local trade union before the agreement is concluded

The agreement is signed by the authorised representative on behalf of the employer in accordance with Mid Sweden University's delegation policy. According to the decisions and delegation policy, it is the Head of HR who is authorised to sign individual agreements.  

A possibility – not an obligation or right

It is important to establish at the outset that individual agreements are a possibility, not an entitlement. Provisions that regulate the possibilities of entering into an individual agreement are designed such that employers assess each individual case and decide whether or not to enter into such an agreement, even if the reason is that the employee wishes to exchange one benefit for another. There may be specific reasons as to why a proposed structure is not suitable from an individual or operational perspective.

The employer's first priority is to take the institution's needs and financial circumstances into consideration. The personnel manager must therefore decide whether the possibility of entering into individual agreements can be applied within their own operations and whether the impact on the organisation is reasonable. Another important aspect to consider is whether the agreement can have a positive impact on motivating, recruiting and retaining employees. 

The following possibilities exist for individual agreements

It is possible to customise the following conditions in individual agreements regardless of which – if any – trade union organisation the employee belongs to:

  • Different working hours
  • Non-regulated working hours
  • The length of the notice period
  • Additional overtime allowance
  • Other overtime compensation

If the employee is a member SACO-S, OFR/S,P,O, or does not belong to a union, the employer and employee can additionally enter individual agreements regarding:

  • Set aside pay to convert earnings to occupational pension
  • Convert saved holiday days to occupational pension
  • The length of holidays
  • Part-day holiday

General conditions

You cannot enter into an individual agreement unless you have a permanent employment contract that begins with a probationary period. If your employment is terminated, you take parental leave or leave of absence, or you are on long-term sick leave (15 days or longer), the agreement automatically ceases to apply with immediate effect. The basic salary before conversion will be used as the basis for salary review.

Application and statement for individual agreements (in Swedish).

Conversion of earnings

Conversion of earnings

According to key collective agreements between the Swedish Agency for Government Employers and Saco-S and OFR/S (PA 16), employees of a government authority may choose for their employer to exchange salary (convert earnings) to that an agreed amount is paid into their occupational pension.   Currently, this possibility is open to members of Saco-S and OFR/S as well as non-union employees.

What is conversion of earnings?

Converting earnings to a pension means saving for a bigger pension in a simple, personalised and beneficial way. Converting earnings to pension involves deductions being made from the gross salary at an optional amount. There is an upper and lower limit for the amount taken. As of 2017-01-01, the funds are placed in the elective component of the pension in accordance with the new PA16 pension agreement. The elective component is set up without repayment cover, so the employee needs to actively choose repayment cover. The offer is beneficial in that the deductions lower the gross salary, which means that tax for the employee is reduced, as are social security contributions paid by the employer.

Conversion of earnings means that an employee exchanges some of their gross salary (that is, the salary before tax) for a benefit – In this case, an occupational pension. The employee pays no tax for the amount that is converted, instead paying income tax when the money is paid out as a pension.

Who is eligible for conversion?

The possibility of converting earnings is open to employees who are members of Saco-S, OFR/S or do not belong to a union, and applies until the calendar month before the one in which the employee reaches the retirement age of 65.

How does conversion of earnings work?

If a person chooses to convert their earnings, an individual agreement is signed between Mid Sweden University and the employee. The agreement applies indefinitely, and the notice period on both sides is three months. The conversion of earnings takes effect from the month after the agreement has been signed. The insurance premium is always paid in advance, so the converted amount is deducted from the first month, and the first premium from the second month. Mid Sweden University thereafter pays the agreed amount monthly. The amount is paid into the elective component of your pension and to the insurer you have selected for it. 

If you are given a new position at Mid Sweden University, the conversion agreement continues unless otherwise agreed upon. The minimum amount that can be voluntarily saved is 500 SEK per month. Regular praxis on the market is that the total amount saved for an occupational pension should not exceed 35% of the gross salary.

Since, according to PA16, the employer is obligated to inform the relevant trade union organisation about conversion of earnings, the employee needs to give the name of the organisation they are a member of together with their conversion of earnings request. This should be done using the Överenskommelse – Löneväxling ('Agreement – conversion of earnings') form, with a note stating either 'Saco', 'OFR' or 'Non-union'.

Cancelling conversion of earnings

Earnings are converted only when it is possible to make a full salary deduction. Things that can prevent a full salary deduction include parental leave, leave of absence, sick leave or payments that need to be made to the Swedish Enforcement Authority. Otherwise, ongoing agreements may be allowed a hiatus on written request. The request must state the length of time desired and the reason. There is a three-month notice period for hiatus requests. The application should be submitted to the HR department.

Termination of conversion of earnings agreement

The agreement may cease to apply:

  • Upon the employee's request during ongoing employment
  • If employment at Mid Sweden University is terminated
  • If the employee takes full parental leave or leave of absence, or must take long-term sick leave
  • Upon the employer's request, if the taxation rules, other legislation, or circumstances otherwise change.

Changing the conversion amount

Employees who wish to change the amount of earnings to convert need to sign a new agreement.

Where are the funds placed?

The money is placed into the same fund with the insurance provider that you have chosen for the elective component of your pension. If you have not chosen your own insurer, the funds are placed in Kåpan Valbar at Kåpan Pensioner.

Example of how it works in practice

In August, an employee who earns 50 000 SEK chooses to convert 2 000 SEK of their earnings from September. Deductions begin to be taken starting from September's salary. In October, Mid Sweden University pays 2,000 SEK into the elective component of your pension. If the employee has not made their own choice, the funds are placed into Kåpan Valbar at Kåpan Pensioner.

The employee is taxed according to their reduced gross salary of 48 000 SEK (50 000-2 000), which means that they pay a lower income tax.

Something for employees to keep in mind

Conversion of earnings can be financially beneficial for employees who have a monthly salary of at least 45 865 SEK after the deduction for conversion (8,07 ibb 2021). Those whose gross salary after conversion falls below this amount lose, amongst other things, old-age pension in the public pension system. Parental insurance, sickness benefit and unemployment benefits can also be affected, depending on the size of the salary after conversion of earnings. Conversion can thus negatively affect other benefits. Employees are therefore not advised to convert their earnings if their fixed salary amounts to less than 45 865 SEK after conversion (2021).

Advice and further information 

Mid Sweden University does not give advice on issues relating to conversion of earnings. For more information, please consult the National Government Employee Pensions Board, and pension/bank advisors etc.

Forms for conversion of earnings are available (in Swedish) in Forms and templates.

Waiving holiday in return for a one-time payment into an occupational pension fund

Employees who receive a monthly salary may, through an individual agreement with their employer, waive their holiday days in return for a deposit into their occupational pension. This is done by the employer as a one-time payment.
The value of a holiday day from 1997 or later is 5.09% of the fixed salary for those who are members of a trade union affiliated with Saco-S, and is therefore covered by the  Villkorsavtal-T agreement. 
For an employee who is a member of OFR/S, the value of a holiday day from 1997 or later is 5.04% of the fixed salary.

Example 1

An employee (Saco member) receives 30,000 SEK per month in salary and would like to set aside 10 saved holiday days to be paid into Kåpan Valbar.
30,000 SEK per month x 5.09% = 1,527 SEK x 10 holiday days = 15,270 SEK.

Example 2

An employee (ST member) receives 30,000 SEK per month in salary and would like to set aside 10 saved holiday days to be paid into Kåpan Valbar.
30,000 SEK per month x 5.04% = 1,512 SEK x 10 holiday days = 15,120 SEK. 

At least 20 of the year's holiday days must be used for rest and relaxation.

The application should be sent to the Divison of HR in the beginning of November each year.

Agreement forms for exchanging saved holiday days for pension funds will be found (in Swedish) in the Forms and templates section.