In 2020, Finns retired on an earnings-related pension five months later than in 2019, at 61.9 years on average. A total of 42,000 persons retired on an old-age pension, which is slightly fewer than in 2019. Continued working raised the employment rate among the elderly to a record-high level.

1. Effective Retirement Age
in the Earnings-related
Pension System in 2020
www.etk.fi/statistics
Effective Retirement Age

2. |
Content
• Number of new retirees on an earnings-related pension
• Development of effective retirement age
• Employment
• Expected length of working life
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 2

3. |
Drive to defer retirement monitored by means of
• Expected effective retirement age:
– corresponds in principle to life expectancy,
– describes average effective retirement age if retirement and mortality rates
remain unchanged at the level of the statistical year, and
– is unaffected by demographic age structure.
• Employment rate of older people
• Expected length of working life:
– depicts the number of years that a person at a certain age can be expected
to be in an employment relationship or work as a self-employed person
during their remaining life span, and
– based on a method that uses cross-sectional data on mortality risk rates,
labour force participation rates and employment rates.
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Effective Retirement Age | The Finnish Centre for Pensions | 3

4. |
Effective retirement age in 2020 (1/2)
• Expected effective retirement age
– 61.9 years (for 25-year-olds)
– 63.8 years (for 50-year-olds)
• Clear rise in effective retirement age
– 25-year-old’s expected effective retirement age was up 0.4 years from
the year before
– 50-year-old’s expected effective retirement age was up 0.4 years from
the year before
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Effective Retirement Age | The Finnish Centre for Pensions | 4

5. |
Effective retirement age in 2020 (2/2)
• Retirement rate declined especially among 63-year-olds
– Persons who reached their earliest eligibility age for the old-age pension in
two age groups
o Those born in 1956 (retirement age 63 years and 6 months)
o Those born in 1957 (retirement age 63 years and 9 months)
• Number of new retirees on an old-age pension declined by 5.6%
– Number of new retirees on an old-age pension and a disability pension
decreased
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 5

6. |
New retirees on an earnings-related pension 2004–2020,
by pension benefit
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 6
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
2004 2006 2008 2010 2012 2014 2016 2018 2020
Persons
61,312 persons retired on an earnings-related pension in 2020
64,940 persons retired on an earnings-related pension in 2019
* The number of new retirees does not include people who retired on a part-time pension or a partial old-age pension.
Partial old-age
pension*
Part-time pension*
Special pension
for farmers
Unemployment
pension
Disability
pension
Old-age pension

7. |
New retirees on an earnings-related pension, by age
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 7
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
22 000
24 000
-54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69-
Persons
Age at retirement
2019 2020

8. |
New retirees on an earnings-related pension, by age
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 8
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
22 000
24 000
26 000
-54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69-
Persons
Age at retirement
2006 2013 2020

9. |
New retirees on an earnings-related disability pension
in 2019 and 2020
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Effective Retirement Age | The Finnish Centre for Pensions | 9
0
200
400
600
800
1000
1200
1400
1600
1800
2000
18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63
Persons
Age at retirement
2019 2020

10. |
Expected effective retirement age,
all new retirees on an earnings-related pension
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 10
57
58
59
60
61
62
63
64
65
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Age
50-year-olds
25-year-olds
63.8
61.9

11. |
New retirees on an earnings-related pension
as a proportion of all insured persons, 25–49-year-olds
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 11
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1,0
25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49
%
Age at end of statistical year
2018 2019 2020

12. |
New retirees on an earnings-related pension
as a proportion of all insured persons, 50–69-year-olds
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 12
0
5
10
15
20
25
30
35
40
45
50
55
60
50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69
%
Age at end of statistical year
2018 2019 2020

13. |
Rising Retirement Age and Changes to Retirement (1/2)
• In 2020, a total of 61,300 persons retired on an earnings-related
pension
– Down by 3,600 (5.6%) from 2019
– Down by more than 14,000 persons from level before the 2017 pension
reform
• 42,100 new retirees on an old-age pension
– Down by 2,400 (5%) from 2019
– Oldest of the 1957 cohort reached their old-age retirement age
(63 years and 9 months)
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 13

14. |
Rising Retirement Age and Changes to Retirement (2/2)
• In 2020, a total of 19,100 persons retired on a disability pension
– Down by 1,200 (6%) from 2019
– 30% began as partial disability pensions
• Pension contingency reduced in particular among the 63-year-olds
• Partial old-age pension taken out by 13,000 persons in 2020
(up by 700 from 2019)
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Effective Retirement Age | The Finnish Centre for Pensions | 14

15. |
Expected effective retirement age: Aim and realisation
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Effective Retirement Age | The Finnish Centre for Pensions | 15
58
59
60
61
62
63
64
65
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Expectancy
Aim for 2025:
62.4 years
Reaching the goal requires that the effective retirement age rises steadily by 0.1 years per year.
Expectancy for
25-year-olds

16. |
Outlook (1/2)
• The 2005 pension reform clearly increased the effective retirement age
• The 2017 pension reform further raises the effective retirement age
– In recent years, raising the old-age retirement age has deferred retirement
and reduced the number of new retirees on an old-age pension.
– The number of new retirees declined also in 2020.
– The total number of new retirees has declined significantly.
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 16

17. |
Outlook (1/2)
• Future trends will depend on changes in behaviour
– Intended retirement ages have risen.
– Retirement decisions influenced by multiple factors
• Future trends will depend on economic outlook and changes in
working life
• In 2021, the number of new retirees is expected to be on the 2020
level
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 17

18. |
Employment rates for the working-age population (15–64 years),
younger people (25-34 years) and older people (55-64 years)
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 18
0
10
20
30
40
50
60
70
80
90
2008 2010 2012 2014 2016 2018 2020
%
15–64 years 25–34 years 55–64 years

19. |
Employment rates for persons aged 55–64
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 19
Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland
0
10
20
30
40
50
60
70
80
2008 2010 2012 2014 2016 2018 2020 2008 2010 2012 2014 2016 2018 2020
%
55–59 years 60–64 years
Employment rates in 2020: 55–59-year-olds 78.8% and 60–64-year-olds 55.9%
Employment rates in 2019: 55–59-year-olds 79.1% and 60–64-year-olds 54.2%

20. |
Employment rates for persons aged 55–67
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 20
Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland
0
10
20
30
40
50
60
70
80
90
55 56 57 58 59 60 61 62 63 64 65 66 67
%
2002 2007 2012 2017 2020

21. |
Unemployment rates for persons aged 55–64
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 21
Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland
Unemployment rates in 2020: 55–59-year-olds 6.8% and 60–64-year-olds 8.4%
Unemployment rates in 2019: 55–59-year-olds 6.3% and 60–64-year-olds 7.1%
0
1
2
3
4
5
6
7
8
9
2008 2010 2012 2014 2016 2018 2020 2008 2010 2012 2014 2016 2018 2020
% 55–59 years 60–64 years

22. |
Average employment rates of 55–64-year-olds
in Nordic and EU countries in 2010–2019
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Effective Retirement Age | The Finnish Centre for Pensions | 22
Source: Eurostat, Employment, Labour force survey
0
10
20
30
40
50
60
70
80
90
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%
Iceland
Sweden
Norway
Denmark
Finland
EU 15
EU 28

23. |
Strong employment trends among older people
(55–64-year-olds) (1/2)
• Employment rate declined in 2020
– Employment rate of working-age population in 2020 was 71.6%
(down by 1.0 percentage points from 2019)
– older people’s employment has developed favourably in the 2000s
– employment rate in age group 55–59 was 78.8%, down by 0.3 percentage
points from 2019 (when it reached a statistical record-high)
– employment rate in age group 60–64 continued to rise in 2020 and reached
a statistical record-high level of 55.9%
(up by 1.7 percentage points since 2019)
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 23

24. |
Strong employment trends among older people
(55–64-year-olds) (2/2)
• Employment rates for older people in Finland lower than in other
Nordic countries in 2019
– Of the Nordic countries, Denmark is closest to Finland
(Denmark 4.5 percentage points ahead)
– EU15 countries lagging behind Finland by 5.4 percentage points
• Employment rates may change quickly as a result of the corona
pandemic
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 24

25. |
Expected length of working life for a 15-year-old
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 25
0
5
10
15
20
25
30
35
40
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Years
Expected labour force participation
Working life expectancy

26. |
Working life expectancy for a 15-year-old
25 Feb 2021
Effective Retirement Age | The Finnish Centre for Pensions | 26
0
5
10
15
20
25
30
35
40
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Years
Males Females

27. |
Length of working life in 2020
• Expected labour force participation in 2020 was 38.6 years
– decline of 0.1 years from 2019
– increase of 3.6 years in the 2000s
– increase for men 3.3 years in the 2000s
– increase for women 3.8 years in the 2000s
• Working life expectancy in 2020 was 35.5 years
– decline of 0.5 years from 2019
– increase of 4.0 years in the 2000s
– 35.8 years for men (up by 3.4 years in 2000s)
– 35.1 years for women (up by 4.5 years in 2000s)
25 Feb 2021
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