Keva, the largest pension fund in Finland which covers municipal staff, said it has developed a new model for predicting disability among public-sector workers, which gives a more accurate picture of the risk, thereby helping the firm direct prevention efforts.
Worker disability is a major financial risk for pension firms because of the cost of providing early-retirement disability pensions.
Petra Sohlman, Keva’s statistical analyst responsible for the development of the model, said: “The prediction model helps to direct the attention of work ability experts to those groups of employees where the need for early intervention is especially great, and to shed light on the factors behind the risk.”
The €64bn pension fund said the new forecast model made it possible for public-sector employers to examine the disability pension risk in different groups of employees in more detail than before, and to compare the groups with the help of factors influencing the risk.
The cost effects, such as the direct costs of being sick and the pension payment effects of realised risk, could also be estimated with the help of the model, it said.
Keva said that in the Finnish municipal sector, between four and five thousand people transfer to disability pensions every year, and that reducing all sickness absence periods by 10% could cut disability pensions by 8%.
On the private-sector side of occupational pensions in Finland, Veritas chief executive officer Carl Haglund, said back in April that something had to be done about the high numbers of younger people retiring on disability pensions.
He said that in 2021, eight people under the age of 35 had retired on disability pension for mental health reasons every day.