Among eight continental European countries, Sweden and Finland have the lowest pension contributions when statutory minimum as well as occupational pensions are counted, while Italy and Denmark have the highest, according to a new study.

The Finnish Centre for Pensions (Eläketurvakeskus, ETK), the central body of the country’s statutory earnings-related pension system, this morning published its new 137-page study comparing pension contribution levels cost-sharing in statutory and occupational pensions in Denmark, Finland, France, Germany, Italy, the Netherlands, Norway and Sweden.

Mika Vidlund, liaison manager at the organisation, said: “The comparison provides a good overall picture of the price of pensions in the countries included in the comparison, regardless of the structural differences in pension provision.”

According to the study, pensions were the least expensive in Sweden and Finland, where contribution income for pensions amounted to just over 12% of GDP.

They were the most expensive in Italy and Denmark, where they totalled nearly 17% of GDP, while on average, the contribution income in the eight countries equalled more than 14% of GDP.

The comparison covers all contribution income paid by employees, employers, the self-employed as well as the state in 2020.

If only statutory contributions were compared, Vidlund said, Finland’s contribution level would seem much higher.

ETK said many things affected the contribution level, such as population structure, the use of pension assets, pension levels and effective retirement age.

It commented that Sweden and Finland had prepared for an ageing population by funding part of the pension contributions. Finns, the centre said, had deferred retirement considerably in the 2010s.

But all countries in the comparison had curbed the growth of pension expenditure by adjusting pensions to the change in life expectancy, said ETK.

Sweden and Finland had lower price tags for their pensions that had other countries in the study, partly because pension benefit levels were lower in those two Nordic countries than in most others included in the comparison – even though Swedish and Finnish benefits were average in the EU, the centre said.

As for pension benefit levels in Denmark and Italy, these were at the other end of the scale in the eight-country comparison, it said.

“The Danish national pension, financed by the state, is generous and paid to all,” said Antti Mielonen, senior adviser at ETK, adding: “The high Italian contribution level is explained by an ageing population, high benefits and limited funding.”

Employers paid the largest share of pensions in all eight countries, with the exception of Denmark, according to the study, which also found that on average, employers financed half of the contribution income, employees 20% with tax revenues funding the remaining 30%.

In Finland and Sweden, the researchers found that the financing of pensions relied heavily on pension contributions, whereas in Germany and Italy, the contribution base for occupational pensions had been broadened by increasing the proportion of tax revenues, which had the effect of reducing the pension contributions required from employers and employees, according to ETK.

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