Government to ask for OECD assessment on proposals for retirement reform

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The government and labour market organisations are taking one month of extra time to weigh the results of the work of two task forces which have been pondering future retirement and pensions policy in a situation in which the working-age population is shrinking.
     Prime Minister Matti Vanhanen (Centre) said on Monday evening after meeting with labour market leaders at his official residence at Kesäranta, that it is premature to evaluate what impact the results that have been achieved might have on the goal of extending people’s working careers.
      “That work will be done in the coming month”, Vanhanen said.
     
An evaluation is to be made on a tripartite basis, involving representatives of the state, the unions, and employers.
      However, Vanhanen also says that the Organisation of Economic Cooperation and Development will be asked for an outside evaluation of the impact of the proposals on the lengthening of working careers. Further action will be decided upon later.
     
A working group on structural reform of the pension system, headed by Jukka Rantala, Managing Director of the Finnish Centre for Pensions, will not continue its work, even though it was not able to reach a unanimous decision on proposals.
      Vanhanen said that he had asked on behalf of the government, if the group might be able to keep working a few more days. The answer was that the work has been done for now, and new proposals are forthcoming.
     
Another team, headed by Jukka Ahtela, one of the directors of the Confederation of Finnish Industry (EK), pondered changes to working life. Ahtela’s group did manage to agree on a set of proposals, which they hope could lead to an extension of working careers by about a year.
      The Prime Minister has said that the idea is that the measures to be decided upon now, combined with the pension reform of 2005, will bring about an average three-year extension of people’s working careers.
      The changes made five years ago are expected to keep people at work 1.5 years longer than before.
     
The proposals of Ahtela’s group include occupational health care to all employees regardless of the field that they work in, or the duration of their employment. The idea is that closer cooperation between the work place and health care could nip many health problems in the bud, keeping employees healthier for a longer time.
      Another proposal is to offer traineeships for all of those who complete comprehensive school, as a way to prevent young people from being marginalised from work.
     
Vanhanen said that there is a considerable gap between promises made to the public on welfare issues, and reality, stemming largely from the ageing of the population, as well as the impact of the economic crisis.
      He said that from the point of view of the citizenry, the best and fairest way to ease the gap is to extend people’s working careers at both ends - getting young people started at their first jobs sooner, and keeping ageing citizens at work longer. The other alternative would be to implement severe measures, such as tax hikes and spending cuts.
     
The central labour organisations said that they were fairly satisfied with the outcome of the negotiations. The Confederation of Finnish Industry (EK) said that the results of the work of the groups will not raise pensions by three years until 2025.


Previously in HS International Edition:
  Disagreement over raising retirement age threatens to delay Rantala working group (1.2.2010)
  Average retirement age has increased in Finland (28.1.2010)
  Pension changes set to lead to longer working careers (24.11.2009)
  Organised labour angered by government decision on old-age pensions (26.2.2009)

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