Topical issues

The Finnish Centre for Pensions compared pension contribution levels in eight European countries. Pensions cost the least in Sweden and Finland, just over 12 per cent relative to GDP. The highest price tag on pensions is found in Italy and Denmark. Employers pay the main part of pension contributions in all other countries except Denmark.

The population is ageing, which has consequences for the pension system. In response, policy reforms across Europe have aimed at extending working lives and postponing the retirement of older workers. However, one actor is often overlooked in these changes: the employer.

In Finland, employment among the 60–68-year-olds increased in all educational levels between 2006 and 2018. As a rule, educational inequalities in employment has narrowed, a study by the Finnish Centre for Pensions shows.

The Ministry of Social Affairs and Health has confirmed the 2023 indexes for earnings-related pensions. The earnings-related pension index will rise by 6.8 per cent and the wage coefficient by 3.8 per cent compared to 2022. Because of the exceptionally high increase in the earnings-related pension index, the timing of retirement matters if the plan is to retire at the turn of the year 2022-2023.

The long-term pension financing outlook has improved considerably due to favourable investment returns. At the same time, uncertainty about future contribution rates has grown. If the birth rate remains low, an increasing share of rising pension expenditure will have to be covered by returns on pension assets.

This year, Finland ranked fifth in the international Global Pension Index comparison. Finland’s ranking improved by two places from last year when the comparison’s calculation method was changed. Once again, the Finnish pension system was ranked the most transparent and reliable pension system in the world.

The expected effective retirement age has risen more rapidly than expected. Yet the lower-than-projected birth rates and work-related immigration call for new measures to achieve sustainable long-term pension financing.

Around half of the employers assessed that the problem-solving ability as well as knowledge and skills of workers older than 55 are better than of the average worker, a fresh study by the Finnish Centre for Pensions reveals.

In addition to the long period of polar nights, anybody moving to Finland may be surprised by the bureaucracy relating to working here. The Finnish Centre for Pensions works alone and together with various actors to make social security matters understandable for people coming to Finland from abroad.

The impact of vocational rehabilitation could not be shown in the study which utilized preliminary decisions for vocational rehabilitation. Getting a preliminary decision did not have a clear impact on employment or earned income.