Effective Retirement Age

Effective retirement age edging up

New retirees on an earnings-related pension, by age

In 2018 the expected effective retirement age under the earnings-related pension system was 61.3 years, up 0.1 years from the year before as predicted in early forecasts. The rise in the effective retirement age is being driven particularly by the higher age threshold for old-age pension. Changes in effective retirement age are measured by the expected effective retirement age, which is based on the retirement rates for different age groups.

The number of new retirees on an earnings-related pension in 2018 came in at just under 69,000, clearly less than in 2017. The number of people retiring on an old-age pension fell by almost 8,000 to 49,000 as a result of the increase in the age threshold for old-age pension.

The number of new retirees on a disability pension has decreased appreciably over the past 10 years. But in 2018 the number of new disability pensions was up by 7 per cent: the number of persons retiring on a disability pension was more than 1,000 higher than the year before. One-quarter of this increase is attributable to persons under 50 and one-half to persons over 60 years of age. In 2018 almost 20,000 persons retired on a disability pension.

Expected effective retirement age for 25-year-olds and 50-year-olds

 Year 25-year-olds  50-year-olds
2010 60.4  62.3
2011 60.5 62.4
2012 60.9 62.7
 2013  60.9 62.6
 2014  61.2  62.8
 2015  61.1 62.8
2016 61.1 62.8
2017  61.2  62.8
2018  61.3  63.1

Statistical tables and figures:

Read more:

Statistical services provides further information:

Description

Effective Retirement Age

Producer: Finnish Centre for Pensions
Website: https://www.etk.fi/en/statistics-2/statistics/effective-retirement-age/
Subject area: Social security
Part of the Official Statistics of Finland (OSF): No

Description

These statistics describe the effective retirement age under the Finnish earnings-related pension scheme.

Data content

Effective retirement age is described by three measures of central tendency: expected effective retirement age, median age and average age.

Categorizations

Sector of employment, gender, age, pension benefit

Methods of data collection and source

The statistics are based on register data from the earnings-related pension scheme.

Update frequency

Once a year.

Time of completion or release

The statistics are released in the February of the year following the statistical year. The exact date of publication is given in the release calendar, go to www.etk.fi/en/statistics-2/statistics/release-calendar/.

Time series

The time series for the statistics start from 1996. Private sector time series extend back to 1983.

Key words

social insurance, pension, earnings-related pension, retirement, effective retirement age

Contact information

Jari Kannisto
Development Manager
+358 29 411 2232, jari.kannisto(at)etk.fi

Concepts and Definitions

Concepts and definitions

Expected effective retirement age

Expected effective retirement age is an indicator developed by the Finnish Centre for Pensions for the measurement of effective retirement age. The indicator is unaffected by the population age structure. It describes the average effective retirement age for persons of a certain age who are insured under the earnings-related pension scheme, proceeding from the assumption that the retirement and mortality rates for each age group are unchanged from the year of observation.

Expected effective retirement age is calculated for both 25-year-olds and 50-year-olds. The expectancy for 25-year-olds describes the effective retirement age for the whole population with earnings-related pension insurance, and it is used as the official indicator to describe changes in effective retirement age.

The expectancy for 50-year-olds is calculated for insured persons who have reached the age of 50. As persons who have retired before age 50 are not included in the calculation, the expectancy for 50-year-olds is always higher than for 25-year-olds. The difference describes the impact that people retiring at age 25–49 have on effective retirement age.

Average

Average retirement age is the arithmetic mean of the ages of new retirees. Average age is calculated based on age at the onset of retirement.

Median

Median retirement age is the midpoint observation for the dataset, i.e. half of the new retirees are younger and the other half older than the median. Median age is calculated based on age at the onset of retirement.

New retirees on earnings-related pension

New retirees on an earnings-related pension are defined as persons whose pension based on their own employment started during the statistical year, or whose pension eligibility has started earlier but who have only received a decision on their pension during the statistical year. A further requirement is that the person has not received any employment-based pension in one’s own right (excluding part-time pension and partial early old-age pension) for at least two years.

Figures for different types of pension benefit require that the person has not received the pension benefit in question for two years. For new retirees on an old-age pension, the person shall not have received any employment-based pension in one’s own right (excluding part-time pension and partial old-age pension) for two years.

Statistics for partial early old-age pension, which was introduced in 2017, are compiled using the same rules as for part-time pension. In other words, persons who have chosen to take early payment of a partial old-age pension are not counted as new retirees.
Survivors’ pensions are excluded from the examination of new retirees.

Sector-specific examinations are always focused on the sector concerned, i.e. the number of new retirees is determined based on pensions within that sector alone. In the case of the entire earnings-related pension system, it is required that the person has not received a pension from either sector for two years.

Quality description

Quality description: Effective Retirement Age 2018

The statistics on effective retirement age are compiled and published by the Finnish Centre for Pensions.

The Act on the Finnish Centre for Pensions states that one of the agency’s roles is to compile statistics relating to its functions. Responsibility for the production of statistics at the Finnish Centre for Pensions rests with the Planning Department.

The costs of producing these statistics are borne by the Finnish Centre for Pensions.

Relevance of statistical information

These statistics describe the effective retirement age under the Finnish earnings-related pension scheme.

The phenomenon is described using three measures of central tendency: expected effective retirement age, median age and average age. The indicators used describe effective retirement age in different ways and are suited to different purposes.

Expected effective retirement age

Expected effective retirement age is an indicator developed by the Finnish Centre for Pensions for the measurement of effective retirement age. It describes the average effective retirement age for persons of a certain age who are insured under the earnings-related pension scheme, proceeding from the assumption that the retirement and mortality rates for each age group are unchanged from the year of observation. The indicator only reacts to changes in retirement rates: it is unaffected by changes in the population structure and other demographic phenomena.

Expected effective retirement age is calculated for both 25-year-olds and 50-year-olds. The expectancy for 25-year-olds describes the effective retirement age for the whole population with earnings-related pension insurance, and it is used as the official indicator to describe changes in effective retirement age.

Of the three indicators used, expected effective retirement age provides the most accurate measure of changes over time in effective retirement age.

Average

Average retirement age is the arithmetic mean of the ages of new retirees. Average age is calculated based on age at the onset of retirement.

Average is the most commonly used indicator in international comparisons of effective retirement age.

Median

Median retirement age is the midpoint observation for the dataset, i.e. half of the new retirees are younger and the other half older than the median. Median age is calculated based on age at the onset of retirement.

Median is well-suited to describing the typical effective retirement age in a highly skewed distribution.

New retirees on an earnings-related pension

A new retiree on an earnings-related pension is defined as a person whose pension based on his or her own employment started during the statistical year, or whose pension eligibility has started earlier but who has only received a pension decision during the statistical year.

Persons retiring on a part-time pension or taking early payment of a partial old-age pension are not counted as new retirees.

The concepts and definitions used in the statistics are presented on the statistics homepage at www.etk.fi/statistics/effective-retirement-age/concepts-and-definitions

Correctness and accuracy of data

The statistics are based on register data from the earnings-related pension scheme.

The Finnish Centre for Pensions has responsibility for the content of the central registers of the earnings-related pension scheme, as well as for the management and development of related operations. Provisions on the Finnish Centre for Pensions’ register-keeping duties are set out in the Act on the Finnish Centre for Pensions.

The numbers of new retirees, persons insured for an earnings-related pension and deceased persons in different age groups are derived from register data from the register sources. The analyses are based on total datasets.

Errors found in the statistics are immediately corrected online. A separate bulletin is issued in case of significant errors.

Timeliness and promptness of published data

The statistics are released once a year in the February of the year following the statistical year. The exact date of publication is given in the Finnish Centre for Pensions release calendar.

The data in the statistics are final.

Coherence and comparability of data

The statistics have been compiled since 2003 and time series have been produced retrospectively back to 1996. Private sector time series extend to 1983.

The figures presented in the statistics are consistent with those in the statistics on Earnings-related pension recipients in Finland and Persons insured for an earnings-related pension in Finland.

Availability and clarity of data

The statistical data are released annually on the statistics homepage and in the Finnish Centre for Pensions statistical database at https://tilastot.etk.fi.

A more in-depth analysis of the phenomenon described in the statistics is given in Effective retirement age in the Finnish earnings-related pension scheme, which is published annually in the Finnish Centre for Pensions Statistics series.

The statistics are described on the statistics homepage at www.etk.fi/statistics/effective-retirement-age/description.

For further information on these statistics, contact the Finnish Centre for Pensions Statistical Services at tilastot(at)etk.fi.

 

OUR EXPERT IN THIS AREA: JARI KANNISTO