EurWORK European Observatory of Working Life

Unions reject plans for pensions reform

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In April 2001, the Finnish Ministry of Social Affairs and Health published proposals for the gradual abolition of unemployment pensions (allowing early retirement for long-term unemployed people) and of individual early retirement pensions. The plans have aroused strong opposition from trade unions.

The Ministry of Social Affairs and Health published in April 2001 its strategy proposals for the near future, which include a reform of the pensions scheme. According to the plans, the basic elements of the scheme should be reduced to the retirement pension and the disability pension. The unemployment pension (payable to long-term unemployed people from the age of 60 up until entitlement to a retirement pension at 65) and individual early retirement should be gradually abandoned. It is proposed that the overall pension scheme should be more flexible than at present and should encourage a longer working life.

The Finnish pension scheme has for some time been under heavy pressure to change, due to the low average retirement age of the workforce. Reforms have been under consideration by a tripartite working group, which has not yet been able to bring its work to a conclusion. However, a partial reform was approved in 1999 (FI9908114F). The Ministry's new proposal to reduce pension benefits has aroused a storm of protest among the trade union movement. The disagreement concerns the measures proposed, rather than the raising of the average retirement age, which is a goal approved by all parties. The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) views the Ministry's plans as surprising, because the tripartite working group is still examining the issue. SAK believes that the proposals give one-sided support to the employers' views and will thus make negotiations on the matter more difficult. The Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) also does not approve of the plans and considers that the proposed measures would make the financial position of older people increasingly difficult.

The employers have expressed criticism of the present pensions scheme because of its cost. At present, it is possible for people born before 1944 to receive an individual early retirement pension at the age of 58, and for the remainder of the population to retire early at the age of 60. An unemployment pension is possible at 60, and a part-time pension from the age of 56. The average retirement age in Finland is 59 years, while the statutory retirement age is 65.

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