News Analysis: Pension Age Controversy Heats Up Again in Nordic Region

Anna-Liina Kauhanen, Helsingin Sanomat

February 10, 2012

  Sweden

Swedish Prime Minister Fredrik Reinfeldt dropped a bombshell early in the week when he said that in the future, Swedes should stay at work until the age of 75.
 
Reinfeldt got what he wanted: a major controversy to spark off an inevitable debate on retirement age.
      
In Finland Minister of Finance Jutta Urpilainen (SDP) has promised that the retirement age would not be tampered with in the present government term.

On Thursday, on a visit to Sweden, Finnish Prime Minister Jyrki Katainen (Nat. Coalition Party) voiced similar sentiments to those expressed by Reinfeldt.

 “According to the government programme, the retirement age will not be touched during this electoral term, but it is possible to lengthen working careers in other ways as well.
      
Meeting in Stockholm were the prime ministers of the Nordic Countries and the Baltic region, as well as Britain’s David Cameron. They attended a seminar on the future, whose main topics included how people could be persuaded to stay at work longer.

 “Each year 15,000 more people leave the labour market than are replaced by new people”, Katainen said.

 The most efficient way to maintain tax income is to get people to stay at work a bit longer, Katainen pointed out.
      
Sweden is likely to raise its retirement age in the coming years. Reinfeldt will have to work to reach agreement on the matter with the Social Democrats and the Swedish labour union movement.
 
Reinfeldt’s message to the future forum was that all of Europe should do the same: the retirement systems need to recognise the fact that people are living longer.

 “The negative attitude toward a longer working career needs to be changed.”
      
Reinfeldt’s mantra of the week is that the labour market should make it possible for people to change careers at the age of 60. For those who cannot cope with their old jobs, an option to retiring could be a job that is less demanding.
      
The Swedish government has been busy assembling information to support the raising of the retirement age. The discussion always involves plenty of numbers.

 Life expectancy for Swedish women is expected to increase from 83.6 years to 86.9 years in the period from 20111 to 2060. For men the increase should be from 79.7 to 84.7 years.

 The ratio of people working to those who do not is changing. Whereas 100 people at work are currently supporting 75 people not at work, in 2030 the numbers are expected to be even.
      
Reinfeldt insists that there are ways to influence all of this. “The means can be found when we are more open-minded.”
      
The minimum work pension age in Sweden is 61, but many stay on until 63-65, because those who wait until the age of 65 before retiring are entitled to various additional benefits. As is the case in Finland, the accrual of pensions accelerates for those who stay at work longer.

 The age of mandatory retirement for wage earners in Sweden is 67. The Swedish government has said that it wants to raise this to 69.

 According to calculations by Statistics Sweden, the ageing of the population and longer life expectancy would require that the official retirement age should be raised to 66 in 2015, and to 67 in 2021. In 2033 the retirement age should be 68 if it is to correspond to life expectancy.