Topical issues

Finns are worried about the retirement income of low-income retirees in particular. Retirees’ income gaps and the availability of reasonably-priced social and health services also cause concern. A recent study by the Finnish Centre for Pensions reveals that women are more worried about pension issues than men.

The application of EU regulations on posted workers to Britain will change as the transition period ends. As of 1 January 2021, posted workers will be subject to the regulations of the withdrawal agreement.

Employees’ insured earnings in Finland vary significantly by age and gender. Earnings are lowest among women who have recently joined the labour market and highest among men aged 40. It seems that family formation affects the development of women’s earnings in particular.

Working for one additional year past one’s retirement age raises one’s net income for life with nearly 10 per cent on average. Women benefit more than men from deferring retirement since, on average, they live longer than men.

The tasks of the Finnish Centre for Pensions are extended regarding exemption procedures from applicable law in situations that comply with the EU regulations on social security and social security agreements. In the future, the Finnish Centre for Pensions will also issue decisions regarding exemptions for insuring work abroad.

Although the issue of stabilizing pension financing in Finland will not be acute until the 2050s, the alternatives to tackle the problem need to be addressed now. In addition to abolishing routes to early retirement, raising the retirement age or cutting pensions can be used to balance financing. Another alternative is to employ various automatic stabilizing mechanisms.

The Finnish pension policy objectives have been mainly successful. Pensioners’ economic well-being does not drop dramatically at retirement, and the income of low-income people even improves slightly. After retirement, incomes remain fairly stable. However, for some retirees, poverty is long-lasting. This is evident in a doctoral dissertation by Juha Rantala for the Universit of Turku. The research is based on longitudinal register data.

How well do citizens know the basics of the pension system, the pension benefits and how pensions are financed? What do people think about pensions in Finland and Sweden? These and other new facts will be presented at our online research seminar on 3 December.

Only 13 per cent of the Finns know how much they pay in pension contributions. 29 per cent underestimate their pension contribution rate. These are results revealed in a new survey on pension knowledge conducted by the Finnish Centre for Pensions.

The majority of older workers defer retirement and continue working in pace with the rising retirement age. Last year, around 45,000 Finnish citizens retired on an old-age pension.