As Finland gears up for next year’s general election, pensions lobby TELA is calling for political parties to prioritise very long-term issues such as education to bolster future pension provision – as well as increasing funding in the partly-funded occupational pension system.
Launching a set of goals that its members – earnings-related pension insurers such as Keva, Ilmarinen and Varma – want to see included in the next government’s programme, TELA said it was time to focus on strengthening Finland’s growth.
The industry association’s first proposal, as parties begin setting out their stalls for the April 2027 vote, is to raise the level of education to the point that by 2040, 70% of young people will have a degree.
Mikko Koskinen, TELA’s director of communications and public relations, said: “The skills needs of the labour market have developed in this direction and the skills requirements will continue to rise.”
Raising the level of education counteracted the impact that the shrinking of younger age groups had on the development of the wage bill – which forms the basis for paying earnings-related pensions – by strengthening productivity, TELA said.
According to OECD data, Finland’s tertiary education attainment rate among young adults fell to 39% in 2024 from 40% three years before.
TELA said the debate on pensions in Finland had often focused on the situation of other public finances – weak state finances in particular.
“In such cases, people also look for solutions to correct them from within the pension system, and these are justified by intergenerational fairness,” it said, adding: “However, intergenerational fairness cannot be built and assessed only within the pension system.”
“Intergenerational fairness cannot be built and assessed only within the pension system”
When it entered office in 2023, the current government of Petteri Orpo immediately focused on changing the pension system, seeking to stabilise the level of pension contributions over the long term and bolster public finances – a drive which led to the reform now going before parliament.
Other proposals
TELA’s other proposals include setting a numerical target for labour-related immigration that it said would increase human capital in the 2030s, and reforming legislation on earnings-related pension rehabilitation, arguing that effective restoration of people’s ability to work if they became ill was the key to longer careers.
The next government should also aim to create a private equity fund structure that corresponds to international market standards, according to TELA.
“Finland must be made an attractive destination for private equity funds from the perspective of both domestic and foreign private equity investors,” it said.
Other proposals coming from the Helsinki-based organisation are for legislative amendments around bankruptcy and liquidation of pension insurers, which TELA said currently differed from corporate bankruptcy law, and for reform to make entrepreneurs’ pension contributions depend on actual earned income – which it said could be determined based on available register data.
According to a 2022 study by the Finnish Centre for Pensions (Eläketurvakeskus, ETK), 74% of entrepreneurs reported higher taxable earned income than the income used to determine their contributions to the YEL pension scheme for self-employed people.
“Funding must be developed and investment returns must be allocated to funding pensions for younger age groups”
Lastly, TELA proposed the next government pressed ahead with legislative changes on the funding of earnings-related pensions, saying this had to be bolstered for the sake of intergenerational fairness.
“Funding must be developed and investment returns must be allocated to funding pensions for younger age groups,” the association noted.
Speaking at an event hosted by TELA this morning in Helsinki to launch the lobby group’s proposals, Mika Maliranta, professor of economics at the University of Turku, said: “The long-term playing field is politically difficult – that is, to talk about solutions that do not give immediate results, and to find the patience to wait”.
