OECD urges Finland to raise retirement age to 65

Meagre results from pension working groups criticised

print this

The Organisation of Economic Cooperation and Development (OECD) has criticised the outcome of recent discussions held in Finland over pensions and retirement age as meagre. The organisation has sent an unofficial draft of its evaluation to Finland.
      Helsingin Sanomat has learned that the OECD feels that it is not possible to make a quantitative evaluation of the proposal. That is, it is impossible to evacuate how long the working careers of Finns would increase. The organisation feels that the proposal is excessively optimistic.
     
The OECD was one of the bodies which the Finish government had asked for an evaluation of the outcome of the Finnish pension talks.
      A year ago the government set up a two working groups to ponder the possibility of raising the retirement age by three years from the current average fo 59.4 years. One of the groups, headed by Jukka rantala failed to reach consensus, and the other, headed by Jukka Ahtela came up with a very scattered paper.
      Ahtela’s group calculated that its proposal would delay retirement by nearly a year, and wold get people started on their working careers somewhat earlier as well.
     
The OECD does not agree with the calculations. It holds on to its old proposals that are partly the same as proposals previously put forward by the Finnish government on keeping people at work longer.
      The organisation says that the age for old-age pension should be raised in Finland from 63 years to 65, and the age for early old-age retirement should be raised from 62 years to 63. Early retirement schemes, especially the “unemployment tube” should be dismantled.
      One civil servant who has seen the statement is not surprised, considering that the OECD has repeated the same ideas in a country survey concerning Finland. An official assessment from OECD Secretary General Angel Gurria is to be sent to Prime Minister Matti Vanhanen (Centre) in the coming days.
     
The OECD assessment is appreciated among Finnish civil servants because the organisation is capable of comparing the Finnish situation on the international level more credibly than domestic evaluators can. Also paying heed to the OECD are companies making assessments of Finland’s creditworthiness. This is especially important when the Finnish state borrows money.
      The government has also asked for comments from a number of economic research institutes, including the Research Institute of the Finnish Economy (ETLA), the Pellervo Economic Research Institute, and the Labour Institute of Economic Research.
      Comments were also asked from the Social Insurance Institution, the Finnish Centre for Pensions, the Finnish Institute of Occupational Health, and the National Institute for Health and Welfare (THL).
     
The assessment by ETLA included similar criticism as the one by the OECD.
      “There is no information based on research that would make it possible to evaluate how much the implementation of these proposals would affect the retirement age. Therefore, there is no foundation to claims of a significant rise in the age of retirement”, says ETLA, criticising the calculations of the Ahtela group.


Previously in HS International Edition:
  Finns expect their pension benefits to deteriorate (8.2.2010)
  Government to ask for OECD assessment on proposals for retirement reform (2.2.2010)
  Disagreement over raising retirement age threatens to delay Rantala working group (1.2.2010)

Helsingin Sanomat