[House Document 110-21]
[From the U.S. Government Publishing Office]



                                     

110th Congress, 1st Session - - - - - - - - - - - - - House Document 110-21

 
 AN AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE KINGDOM OF 
                       SWEDEN ON SOCIAL SECURITY

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

  A SUPPLEMENTARY AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND 
    SWEDEN ON SOCIAL SECURITY SIGNED IN STOCKHOLM ON JUNE 24, 2004, 
                    PURSUANT TO 42 U.S.C. 433(d)(1)




   March 20, 2007.--Referred to the Committee on Ways and Means and 
                         ordered to be printed
To the Congress of the United States
    Pursuant to section 233(e)(1) of the Social Security Act, 
as amended by the Social Security Amendments of 1977 (42 U.S.C. 
433(d)(1)), I transmit herewith the Supplementary Agreement on 
Social Security between the United States of America and the 
Kingdom of Sweden. The Supplementary Agreement was signed in 
Stockholm on June 22, 2004, and is intended to modify certain 
provisions of the original United States-Sweden Agreement, 
which was signed May 27, 1985, and that entered into force 
January 1, 1987.
    The United States-Sweden Agreement, as revised by the 
Supplementary Agreement, remains similar in objective to the 
social security agreements that are also in force with 
Australia, Austria, Belgium, Canada, Chile, Finland, France, 
Germany, Greece, Ireland, Italy, Korea, Luxembourg, the 
Netherlands, Norway, Portugal, Spain, Switzerland, and the 
United Kingdom. Such bilateral agreements provide for limited 
coordination between the United States and foreign social 
security systems to eliminate dual social security coverage and 
taxation, and to help prevent the loss of benefits that can 
occur when workers divide their careers between two countries. 
The United States-Sweden Agreement, as revised by the 
Supplementary Agreement, contains all provisions mandated by 
section 233 and other provisions that I deem appropriate to 
carry out the purposes of section 233, pursuant to section 
233(c)(4).
    I also transmit for the information of the Congress a 
report prepared by the Social Security Administration 
explaining the key points of the Supplementary Agreement with a 
paragraph-by-paragraph explanation of the provisions of the 
Supplementary Agreement. Annexed to this report is the report 
required by section 233(e)(1) of the Social Security Act on the 
effect of the Supplementary Agreement on income and 
expenditures of the U.S. Social Security program and the number 
of individuals affected by the Supplementary Agreement and a 
composite text of the United States-Sweden Agreement showing 
the changes that will be made as a result of the Supplementary 
Agreement. The Department of States and the Social Security 
Administration have recommended the Supplementary Agreement and 
related documents to me.
    I commend to the Congress the Supplementary Agreement to 
the United States-Sweden Social Security Agreement and related 
documents.

                                                    George W. Bush.
    The White House, March 20, 2007.
Report to Congress To Accompany the Supplementary Agreement Between The 
         United States of America and Sweden on Social Security

                              INTRODUCTION

    The proposed supplementary Social Security agreement 
between the United States and Sweden is intended to modify 
certain provisions of the original U.S.-Swedish Social Security 
agreement (TIAS 11266) that entered into force on January 1, 
1987. The supplementary agreement, like the original agreement, 
was negotiated under authority of section 233 of the Social 
Security Act. The supplementary agreement also amends the 
administrative arrangement in force since January 1, 1987, for 
implementation of the principal agreement.

                 U.S.-SWEDISH SOCIAL SECURITY AGREEMENT

    The Social Security agreement between the United States and 
Sweden is one of 20 bilateral agreements the United States has 
concluded with foreign countries to provide limited 
coordination of the U.S. old-age, survivors, and disability 
insurance (OASDI) program with the comparable programs of those 
countries. Like the other agreements, the U.S.-Swedish 
agreement has three main purposes. First, it eliminates dual 
Social Security coverage and taxation, the situation that 
occurs when a worker from the United States or Sweden works in 
the other country and is required to pay Social Security taxes 
to both countries on the same earnings. The agreement includes 
rules that assign a worker's Social Security coverage and tax 
liability to just one country.
    The second purpose of the agreement is to help prevent gaps 
in Social Security benefit protection for workers who divide 
their careers between the two countries. Under the agreement, 
workers may qualify for partial U.S. or Swedish benefits based 
on ``totalized'' (i.e., combined) work credits from both 
countries. When a person qualifies for U.S. or Swedish benefits 
based on totalized credits, the benefit amount is proportional 
to the amount of coverage credit earned in the paying country.
    The third purpose of the agreement is to eliminate 
restrictions that either country might impose on benefit 
payments based on residence in the other country.

                        SUPPLEMENTARY AGREEMENT

    The proposed supplementary agreement would amend the 
original U.S.-Swedish agreement to update and clarify several 
of its provisions. The primary purpose of the supplementary 
agreement, however, is to take account of recent changes to 
Swedish law. The supplementary agreement would also conform the 
original agreement more closely to later Social Security 
agreements that the United States and Sweden have each 
concluded with other countries.
New Swedish Social Security Laws
    When the original agreement was concluded, Sweden had a 
two-tier Social Security system that consisted of an earnings-
related, defined-benefit program and a residence-based, flat-
rate benefit program. Recent Swedish legislation restructured 
the system. People born after 1953 are now covered by a program 
consisting of three components. It includes an earnings-
related, defined-contribution benefit program administered by 
the government, a program of individual investment accounts, 
and a guaranteed minimum pension payable if income-based 
pensions and certain other income fall below specified levels. 
People born before 1938 remain covered entirely under the old 
system, while those born between 1938 and 1953 are covered 
partially under the old system and partially under the new 
system according to a sliding scale that varies with the 
person's year of birth.
Supplementary Agreement Provisions
    Under the original agreement, a person who has not worked 
long enough or recently enough to qualify for Swedish benefits 
can have his or her U.S. and Swedish coverage credits 
``totalized,'' i.e., combined, in order to meet the applicable 
eligibility requirements and qualify for prorated Swedish 
benefits. Other provisions in the agreement allow a person to 
become eligible for prorated U.S. benefits based on totalized 
credits. The supplementary agreement revises the Swedish 
benefit provisions to allow people to qualify for benefits 
under the new Swedish system based on totalized credits. It 
also revises the U.S. benefit provisions by specifying that SSA 
will count periods under Sweden's new system (but only periods 
under the earnings-related program). The supplementary 
agreement makes no other changes in the U.S. benefit provisions 
of the agreement.
    The new Swedish social security law allows people to 
qualify for most benefits with very little coverage credit. It 
is not expected, therefore, that many people will need to have 
their U.S. and Swedish coverage credits totalized to become 
eligible for most Swedish benefits. For example, a person can 
qualify for old-age and survivors benefits under the new 
earnings-related pension program with just one year of Swedish 
coverage, and a contributor to an individual investment account 
under the new system is immediately vested. On the other hand, 
the Swedish program still includes recent-coverage requirements 
for entitlement to disability benefits, and it is expected that 
the totalization provisions of the supplementary agreement will 
be especially important for purposes of meeting these 
requirements. In addition, the supplementary agreement provides 
that U.S. Social Security benefits will not be counted in 
applying pension offsets that normally reduce the amount of 
Swedish disability benefits. Thus, the supplementary agreement 
will provide U.S. workers enhanced disability benefit 
protection under the Swedish system at little, if any, 
additional cost to the U.S. Social Security system.
    Under the supplementary agreement's transitional 
provisions, people who have been partially or fully covered by 
the old Swedish pension program will still be able to qualify 
for benefits under the old system based on totalization. The 
transitional provisions will also allow people with coverage 
credits under Sweden's old pension program to qualify for U.S. 
benefits based on totalization.


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