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Finland's next government will make people work longer

| Text: Carl-Gustav Lindén

Recent year's attempts to increase Finland's pension age from 63 to 65 have slowly gained momentum. The actual pension age has increased following the 2004 pension reform and now stands just over 60.4 years. The number 65 has turned into a hot political potato. While political parties, employers and trade unions tend to agree today's 25 year olds will need to work three years longer than today's pensioners, there is little agreement on how to achieve this goal.

Finns go to the polls in parliamentary elections in April and the new government will inherit what seems to have become an eternal problem. Two years ago the then prime minister Matti Vanhanen came up with an idea which he soon shared with his government colleagues and the parties to the labour market. He wanted to raise the retirement age to 65. This caused an outcry from trade unions and centre-left politicians. Vanhanen had to backtrack. 

But the issue hasn't gone away. The beginning of March this year saw the publication of three new reports highlighting ways to get people to enjoy work and stay in employment for longer. But the reports also outlined measures which would make it more difficult to take early retirement. The experts behind the reports identified a need to improve health care within companies. It would be very difficult to legislate for an increased retirement age, they concluded. 

An election issue

Over the past few months it has become clear that the government does not want to re-examine the raising of the retirement age in fear of the issue overshadowing the election campaign. Prime Minister Mari Kiviniemi (the Centre Party) has made it quite clear that this will become one of the most challenging topics for whoever will negotiate to form a new government. 

Finland has one of Europe's trickiest age structures with an ever decreasing number of breadwinners as large numbers of people enter retirement. The working-age population will shrink by 150,000 people by 2025. Unlike other Nordic countries Finland has not experienced any considerable labour immigration. 

The need to reform the Finnish pension system is not a result of the system itself being broken. It is needed to make sure enough people work longer to guarantee the financing of the future welfare system. Work to identify which measures are needed will continue right up to the parliamentary elections. The aim is to include concrete proposals in the next government's policy programme.


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