In 1998, Sweden adopted a radical new approach to state-based pension provision, with several innovations. Many experts in the United States and elsewhere have been interested in Sweden’s move toward mandatory individual accounts for retirement savings, with workers required to set-aside 2.5 percent of covered wages. For purposes of this brief, however, Sweden’s novel approach to financing the much larger pay-as-you-go state pensions is of interest. The new Swedish pension system contains features that should achieve what the architects of the new system sought—guaranteed and permanent financial solvency at a fixed contribution rate of 16 percent of wages.