Over the past decade and a half, Finnish governments have sought to encourage people to remain in the workforce longer – and now that long-term goal has been achieved ahead of schedule.
The retirement age has risen faster than targeted, while the employment rate of older people has continued to rise.
In 2009, the government agreed with labour market organisations that the average retirement age should be raised from 59.4 years to at least 62.4 years. They agreed to reach that target by 2025 at the latest.
The goal was surpassed last year, with workers in Finland retiring at an average age of 63.2, almost a year later than originally expected.
The positive development strengthens the financing of earnings-related pension security and the tax revenues of the state and municipalities, says Mikko Kautto, CEO of the Finnish Centre for Pensions (ETK).
In a press release, he attributed the development to several changes in pension rules, including the abolition of the unemployment pension, delayed retirement and raising the retirement age for old-age pensions.
Meanwhile changes in working life and improvements in educational levels and work ability have reduced the number of people taking disability pensions.
Kautto points out that people receive higher pensions if they delay retirement and work longer.
Jari Kannisto, Development Manager at ETK, says that the employment rate of people over 60 has increased significantly since the 2017 pension reform.
"Raising the retirement age has had a significant impact on the number of older workers. It has increased by almost 100,000 over the past decade," he said on Friday.
Employment among older people continued to rise last year, even though employment among the entire population declined.
"In the future, an increasingly important labour reserve will be formed by people over the age of 65. In a country with an aging population, more and more of them are already participating in working life," Kannisto said.
The target of raising the retirement age was set by the Centre-led Matti Vanhanen government in 2009. This goal was reiterated by the government of Jyrki Katainen (NCP) in 2013 and in the 2017 pension reform.
