Employers and trade unions disagree over age of retirement
The Confederation of Finnish Industries (EK) has proposed that the standard age of retirement should be raised to 67 years. This proposal has sparked anger among trade unions, which are warning that the country could face a ‘pension war’ if employers try to raise the retirement age. EK argues that an effective strategy to extend working life should involve a quicker transition from education to the labour market, promote well-being at work and reform the pension scheme.
In the spring of 2009, the government appointed a tripartite working group to examine the issue of extending working life. Both trade unions and employers groups are represented. Before the induction of the working group, the trade union side rejected the government’s proposal to raise the retirement age from 63 to 65 years (FI0903019I).
The Director General of the Confederation of Finnish Industries (Elinkeinoelämän Keskusliitto, EK), Leif Fagernäs, has proposed that the standard age of retirement should be raised to 67 years. Mr Fagernäs introduced the idea in a seminar organised by EK. He considers raising the retirement age as a crucial change for Finland’s future, noting that:
Whereas in the other Nordic countries, people can retire after the age of 67, in Finland they can do so at the age of 63. In practice, people in the rest of Scandinavia also retire considerably later than Finns do. The introduction of the Nordic retirement model would remove a major portion of the financial sustainability deficit and the pressure to raise taxes.
Trade unions reject employer proposal
The proposal has sparked anger among trade unions, which are warning that the country could face a ‘pension war’ if employers try to raise the retirement age. The Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) has warned that industrial disputes will be a reality if employers use heavy-handed tactics to lengthen working life. STTK considers the proposal put forward by Mr Fagernäs to raise the standard age of retirement to 67 years as particularly annoying. The Director of STTK’s Labour Market and Regulation Department, Markku Salomaa, also rejects calls by employers to abolish part-time retirement.
The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) has denounced the EK proposal as populist. An Assistant Manager for the Socio-Political Department at SAK, Kaija Kallinen, points out that the average pension age of healthy employees is currently more than 63 years. Among those who have been transferred from working life to disability pension, the average pension age is a little over 52 years, which decreases considerably the general average pension age of Finnish employees. As a result, the current average retirement age is 59.4 years. Mrs Kallinen stated:
What is needed now is the means to avert the marginalisation of employees because of reduced capability to work. An automatic increase of the retirement age is not a right solution, nor an accurate method to lengthen careers.
Employers call for longer careers
EK has dismissed the trade union complaints, calling them ‘a disproportionate threat’. The employer organisation declared that it was genuine in its efforts to reach an accord with trade unions on the issue of the standard retirement age. The EK Legal Affairs Director, Lasse Laatunen, believes that labour market organisations can reach agreement on the issue, despite the fact that a ‘pension war’ and the threat of industrial action have recently been on the agenda of trade unions. Mr Laatunen considers that labour market organisations can find a solution that will lengthen careers by three years by 2025.
Mr Laatunen explained that, to extend careers, three strategies are needed for an efficient package. The package should involve a quicker transition from education to the labour market, promote well-being at work and reform the pension scheme in its entirety. Mr Laatunen also stated that all channels to early retirement should be abolished. In his opinion, if labour market organisations are incompetent to make a decision on this matter, politicians will decide on the issue instead.
Pertti Jokivuori, Statistics Finland