Understanding Finnish Pensions – How old age security became a Nordic success story
Why are pensions such a central part of a welfare state? Why is the Finnish pension system the most reliable one in the Nordics? The new book Understanding Finnish Pensions tells the success story of Finnish pensions. This easy-to-understand and concise book is particularly suitable for experts, decision makers and students who are interested in the Nordic welfare state.
The share of pensioners in the European and Nordic populations is growing rapidly, and the years spent in retirement are a considerable part of a person’s life cycle. Pensions concern all of us: initially as the financers of the pension scheme and later as pension recipients.
Understanding Finnish Pensions, edited by Suvi Ritola and Niko Väänänen, experts from the Finnish Centre for Pensions, explains what type of security the Finnish pension system offers, how pensions in Finland are financed and how the system compares internationally.
“Nordic pension systems are exceptional in themselves, and Finland forms a special case within the Nordics. For example, in Finland, pension provision is mainly based on public pensions, while it is usually made up of several components in the other Nordic countries. Unlike in many European countries, tripartism in pension reforms has not remained a dead letter in Finland. On the contrary, labour market organisations play a strong role in that process”, Väänänen explains.
Significant intergenerational institution
Over the decades, the Finnish pension system has grown into a significant intergenerational institution and pensions have become the single largest expense item of the welfare state. The investment assets of earnings-related pension providers equal almost the annual GDP in Finland. Prefunding of statutory pensions is not very common in Europe.
“The Finnish pension system offers an interesting object of comparison for many pension experts as the reliability and transparency of our pension system’s governance has been assessed internationally to be top-notch. In the 2023 Global Pension Index, Finland received the highest score in this sub-index for the tenth time in a row”, Ritola points out.
Understanding Finnish Pensions is for experts, decision makers and students who are interested in the Nordic welfare state. The book was written by a group of Finnish pension experts and published by SKS Kirjat.
The book is also available in Finnish.
