Average retirement age has increased in Finland

Somewhat surprisingly, the average age of retirement in Finland rose from 59.4 in 2008 to 59.8 last year, regardless of the ongoing recession and rising unemployment

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Experts have been rather taken aback by the fact that the average age of retirement in Finland rose noticeably from 59.4 in 2008 to 59.8 last year, in spite of the ongoing recession and rising unemployment figures.
      In comparison, the pension age in 1999 was below 59 years.
      The pension age keeps rising, as the rules have been changed and as people also live longer.
     
The increase as such is in line with the forecasts made following the major pension reform of 2005 that introduced a so-called flexible retirement age from 63 to 68 years. The objective of the pension reform was to encourage employees to stay at work longer.
      However, a severe economic decline hit the country, and news stories on senior employees being urged to take retirement were reported from various parts of the country. At the same time, it has been said those employees suffering from burnout have left the workforce prematurely since they have been granted disability pensions.
      This development has nevertheless not been reflected in retirement figures - at least not yet.
     
In 2009, the number of those employees who were granted for example disability pensions was around six per cent lower than in the previous year, as indicated by the statistics compiled by the Finnish Centre for Pensions (ETK).
      ”No changes have occured in the decision process. The number of rejected applications has not increased, but the number of applications has declined”, says Jari Kannisto, the Development Manager of the Finnish Centre for Pensions.
      ”The number of those who took disability pensions also declined during the recession in the 1990s. Apparently, unemployment takes away a part of the population”, Kannisto adds.
     
A starting point set by two working groups currently discussing possibilities to raise the average age for old-age pensions is 59.4 years - the average pension age in 2008. One of the working groups is chaired by Jukka Rantala, the Managing Director of the Finnish Centre for Pensions.
      The other similar working group is being led by director Jukka Ahtela of the Confederation of Finnish Industry (EK).
     
The objective is to raise the average pension age ”by at least three years” by 2025.
      ETK’s long-term calculations indicate that under present rules the average age for retirement will be 61 years in 2025.
      However, Rantala and Ahtela are trying to postpone the average age of retirement by yet another 1.4 years, which is a really challenging goal, according to Jari Kannisto, who has long been following retirement statistics.
     
The increase in the average age of retirement in 2009 was largely attributable to the fact that the number of employees taking old-age pension was almost 30 per cent higher than the one in 2008. Such a figure indicates quite a growth peak in retirement statistics.
      The principal reason for the boom was that the first group of postwar baby boomers (born in 1946) turned 63 last year.
      A total of nearly 80,000 people took various earnings-related pensions in 2009.
     
However, ETK does not include in the figure those part-time pensioners who are still continuing their working careers. In 2009, the number of such pensioners increased by more than 8,500, which is much more than in the early years of the current millennium.
     
Those born in 1946 are not even the largest age group of baby boomers, which means that the surge in the numbers of pensioners is to continue in the next few years.
      In 1945 the number of live births shot up from 79,000 to 95,700, and in 1946 it hit 106,000.
      The following year saw the highest-ever annual figure for births in Finland - 108,168.
      Both 1948 (107,800) and 1949 (103,500) also saw figures of more than 100,000 live births, before the numbers began to fall off once more and dipped below 90,000 again in 1954.


Previously in HS International Edition:
  Pension changes set to lead to longer working careers (24.11.2009)
  Number of applications for old-age pension is expected to increase dramatically this year (18.9.2009)
  Opposition parties hint at general strike to support vote of confidence over retirement age plans (27.2.2009)
  Organised labour angered by government decision on old-age pensions (26.2.2009)
  Government decides on gradual raising of minimum age for old-age pension to 65 (25.2.2009)
  Report calls for nearly 5-year increase in retirement age (23.1.2009)

Links:
  The Finnish Centre for Pensions

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