Topical issues

Retirement on a disability pension has decreased clearly among people aged between 50 and 60 years. This is evident when examining the development by successive age cohorts. A study by the Finnish Centre for Pensions shows that full disability retirement has decreased over a longer period of time. At the same time, retirement on a partial disability pension has also decreased as of the cohorts born in the early 1960s.

The group of new disability pensioners includes an increasingly higher share of younger people whose income depends on the national pension or other social security benefits. At the same time, the partial disability pension has gained in popularity. For partial disability pensioners, income from work alongside the earnings-related pension is important. A total of 180,000 persons received a disability pension in Finland in 2023.

More than 60 per cent of Finns find employment-based immigration to be a good means to strengthen pension financing if so required. According to the fresh Pension Barometer, the second most popular alternative is to raise pension contributions. Most respondents object to cutting current or future pensions.

According to statistics of the Finnish Centre for Pensions, nearly 21,000 new partial old-age pensions were paid out in Finland in 2023. The amount was one and a half times higher than the previously established amount, but 14,000 less than in 2022. The exceptional index development in 2022 encouraged people to retire early towards the end of the year.

Educational expansion has improved labour force participation of over-55-year-olds in the last decades. Particularly women’s education level has increased rapidly. Labour force participation of low-educated people has increased at a lower pace in several Member States of the European Union. This is evident from a fresh research article by the Finnish Centre for Pensions.

The accrued pension increases if a person continues to work beyond their retirement age, thanks to both the increment for late retirement and the additional pension accrued for continued working.

The Pro Gradu Award of the Finnish Centre for Pensions has been granted this year to Pellervo Ruponen (MSE). In his master’s thesis Predicting diagnosis classes from medical texts using deep transformer-based models, Ruponen examines the classification of texts in the assessment of disability pension applications.

The number of light entrepreneurs has grown rapidly in recent years. At the same time, the profile of light entrepreneurs has changed: they are increasingly younger, of foreign origin and have only a basic education. The Finnish Centre for Pensions’ study examines, for the first time, the careers, income and pension accrual of light entrepreneurs in Finland over a period of several years.

The investment year 2023 was challenging for pension funds in different parts of the world. The average real return of pension investors was less than 2 per cent. The yield of Finnish pension funds was even worse. Due to high inflation, the average real return 0.2 per cent negative. The average real return of Swedish pension funds was 1.2 per cent negative.

In Finland and Sweden, the old-age poverty risk varies greatly between men and women because clearly more women than men live alone. A research article by the Finnish Centre for Pensions reviews the gender differences in old-age poverty in 14 EU countries. The differences between the northern and southern countries are surprisingly large.