Topical issues

The trust in the pension system is low among the self-employed. The system needs to be reformed.

Extended life expectancy, reduced birth rates and a low interest level drive many coun-tries to seek for ways in which to stabilize the financing of their pension systems. A fresh report by the Finnish Centre for Pensions sheds light on the automatic stabilizing mechanisms in five different countries.

By year-end 2019, a total of 930,000 Finns had accrued pension for periods of child care. The figures are revealed in the advance notice of the statistics of the Finnish Centre for Pensions.

Finland will participate in the electronic exchange of social security information (EESSI) between EU countries in September, starting with information regarding posted workers. The new information system will speed up the sending of A1 certificates from one country to another. The introduction of the new technology may cause temporary delays in the handling of the applications.

A recent study by the Finnish Centre for Pensions shows that the planned retirement age of a worker accurately predicts the actual retirement age. The worker’s work ability, the working conditions at the workplace and the employer’s attitudes also affect actual retirement.

Unemployment, disability and poor health weaken the transition to the labour market for many young people. Their earnings from work are low which often leads also to weaker pensions. This is revealed in a fresh doctoral dissertation.

The pension calculator has been supplemented with statistical data on accrued pensions. The table shows the median pension accrued so far for each birth year group.

The trust in the pension grew last year. If the financial sustainability of the pension system had to be improved, the most accepted measure would still be to raise the pension contributions. Only every third would accept rising retirement ages. The corona crisis has had only a slight impact on the opinions.

Earnings-related pension payments in 2019 amounted to 29 billion euros, up one billion from the year before. There were 44,500 new old-age pension retirees, marking a decrease of 9 per cent from 2018. The main reason for the drop in the number of new old-age retirees is the pension reform decision to progressively raise the retirement age.

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