Research on Pension System’s Financial Sustainability

Monitoring the development of the expenditure and contributions of the pension system is essential from the point of view of the financial, social and political sustainability. We regularly produce data on the future development of pension expenditure, contributions and benefits. In our projections, we take into account, for example, the effect of employment and the effective retirement age on the development of the expenditure and the contributions.

When assessing the financial sustainability of the pension system, we see the pension system as part of the intergenerational income transfer system. In our research, we assess changes in the consumption and labour supply of various age groups relative to changes in taxation and pension provision. As part of the sustainability analysis, we produce information on the short-term and long-term effects of various overall financial disturbances on the pension system.

Current research projects

Investment operations in Finnish earnings-related pension system

Aim: The anthology includes articles on earnings-related pension asset investments from the perspectives of pension financing, history of investment returns and investment allocations, investment regulations, practical investing, supervision and risk management and the evaluation of the pension system. The authors are experts of the earnings-related pension system and investment operations. The anthology contributes to the overall research on pension assets and the investment of such assets.

Realisation: Anthology

Schedule: 2019–2020

Researchers: A total of 11 authors. The editors of the anthology are Eeva Poutiainen and Sanna Tenhunen (Finnish Centre for Pensions).

Long-term pension expenditure and contributions

Aim: We will assess how the statutory pension expenditure and the average benefits have developed, as well as the long-term financing of private-sector earnings-related pensions.

Realization: We will assess the expenditure and contributions with the long-term projection model of the Finnish Centre for Pensions. The model simulates the operations of the statutory pension system and makes it possible to issue projections to meet the forecasting and planning needs of the pension system.

Schedule: Ongoing. Most recent report published in Finnish in the spring of 2019.

Researchers: Kaarlo Reipas, Heikki Tikanmäki and Mikko Sankala