[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.