FINLAND - The introduction of flexible retirement for the old age pension and higher accrual rates for those working past the age of 63 is encouraging people to retire later, the Finnish Centre for Pensions has revealed.
A study commissioned by the Finnish Centre for Pensions on the retirement intentions of the oldest workers and the "significance of the accelerated accrual rate in the postponing of retirement" showed at the end of 2006 almost half of 63 year olds continued to work even though they were entitled to the old age pension.
In 2005 Finland introduced a number of pension reforms including reducing the state pension age to 63 but increasing the rate of accrual for benefits from 1.5% to 4.5% for those continuing to work from the age of 63 to 68.
The survey suggested the decision to work past 63 was explained by a good work ethic, stress-free jobs - and employers with a positive attitude to older employees continuing to work.
The report noted that retirement age and intentions are affected not only by age and gender - with men more likely to continue working than women - but also work and economic issues, as a short career and a pension provided by the employer meant some workers retired earlier.
However the research claimed: "The observed outcome as regards the accelerated accrual rate indicates that the 2005 pension reform steers retirement in the targeted direction. Impaired work ability and supplementary pension provision arranged by the employer led to earlier retirement."
The study, conducted by researchers Seppo Kari Salmi, Eila Tuominen, and Kasimir Kaliva, was based on target group of wage earners born in 1940-45 and work in the private sector.
Findings from the research suggested employer support was also crucial to later retirement, although it highlighted the flexibility of taking part-time work in addition to receiving a pension was more attractive to men than women, and among those living alone or with a poor capacity for work.
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