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Finland amends earnings-related pensions

FINLAND – Finland has made several amendments to earnings-related pensions in the run up to planned reform in 2005.

“The turn of the year brings changes to the earnings-related pensions,” said Eläketurvakeskus, or the Finnish Centre for Pensions, the central body of the Finnish statutory earnings-related pension scheme.

Changes include a rise in earnings-related pensions of 2.3% for those under 65. People over 65 will get a rise of 1.3%.

And it will become less complicated to apply for a pension, the centre said, because pension rights will be consolidated.

“Previously a person who has worked both in the public and the private sector has had to apply separately for the pension from the private-sector pension provider, the State Treasury and the Local Government Pensions Institution,” Eläketurvakeskus said.

“Now the decision will be given by one pension provider, which also pays all the earnings-related pensions.

Finland is set to reform earnings-related pensions in 2005 – with the aim of encouraging older people to stay working.

“The year 2004 is the last year when the present earnings-related pension acts will be implemented in full,” Eläketurvakesku said. “For all those who are currently working, an earnings-related pension will accrue under the current rules until the end of 2004. These pension accruals are preserved for everyone and they will for their part affect the future earnings-related pension.”

And those born in 1939 will be the last with a fixed retirement age of 65. “They will be the last age group who will have targeted the fixed general retirement age of 65,” the centre added – due to the flexible retirement age that will come in as part of the reform.

About 8,400 of the estimated 54,500 people set to reach 65 in 2004 will retire on an old-age pension.

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