Vidlund Mika

People retire at a considerably later age in Finland and Denmark than before. In the last decade, these two countries have caught up with the other Nordic countries in this respect. Also in Estonia, people retire at a significantly higher age. In Norway, on the other hand, the effective retirement age has dropped steeply. What pension policy solutions underly the changes?

The minimum net pension in Norway is the highest in all Nordic countries, but the purchasing power is the largest in Denmark. The Danish can buy a Big Mac each day of the year with one month’s minimum pension. The Finns have to settle for a Big Mac every second day. The Swedes get the lowest number of Big Macs with their monthly minimum pension.

Our pension system is currently sailing through deep waters. The seas are likely to get rougher in the future. Reduced fertility rates and lower interest rates form dark clouds on the sky over our pension system. The most recent gust of icy winds is the corona pandemic, which has only added to the challenges pension financing faces. Yet it is possible to navigate through the rough seas – partly on automatic pilot.

In its latest pension reform, Finland relaxed the rules for retirement, giving people more freedom to combine work and retirement. By introducing a new partial pension, Finland is following the old-age pension scheme design of Sweden and Norway. So far, the experiences from all three countries indicate that people want to combine work and retirement …