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Effective retirement age 2019

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According to the statistics of the Finnish Centre for Pensions, people in Finland retired on an old-age pension at age 61.5 years on average in 2019. This is about one month later than in 2018. A total of 44,500 persons retired on an old-age pension. This is 10 per cent less than in 2018.

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Effective retirement age 2019

  1. 1. Effective Retirement Age in 2019 www.etk.fi/statistics | Effective Retirement Age
  2. 2. Content 2 • Number of new retirees on an earnings-related pension • Development of effective retirement age • Employment • Expected length of working life 27 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age
  3. 3. Drive to postpone retirement monitored by means of 3 • 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. FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  4. 4. Effective retirement age in 2019 (1/2) 4 • Expected effective retirement age – 61.5 years (for 25-year-olds) – 63.4 years (for 50-year-olds) • Clear rise in effective retirement age – 25-year-old’s expected effective retirement age was up 0.2 years from the year before – 50-year-old’s expected effective retirement age was up 0.3 years from the year before FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  5. 5. Effective retirement age in 2019 (2/2) 5 • Retirement rate declined especially among 63-year-olds – Persons born in 1955 are the first age group whose retirement age was raised in connection with the 2017 pension reform. Their retirement age is now 63 years 3 months. For those born in 1956, the retirement age is 63 years and 6 months. • Number of new retirees on an old-age pension declined clearly while the number of new retirees on a disability pension rose slightly FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  6. 6. New retirees on an earnings-related pension 2006–2019, by pension benefit 627 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2006 2008 2010 2012 2014 2016 2018 Persons 64,940 persons retired on an earnings-related pension in 2019 68,910 persons retired on an earnings-related pension in 2018 * 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. 7. New retirees on an earnings-related pension, by age 7FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 0 5 000 10 000 15 000 20 000 25 000 -54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69- Persons Age at retirement 2018 2019 27 Feb 2020
  8. 8. New retirees on an earnings-related pension, by age 8FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 0 5 000 10 000 15 000 20 000 25 000 -54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69- Persons Age at retirement 2005 2012 2019 27 Feb 2020
  9. 9. New retirees on an earnings-related disability pension in 2018 and 2019 927 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 Persons Age at retirement 2018 2019
  10. 10. Expected effective retirement age, all new retirees on an earnings-related pension 1027 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 58 59 60 61 62 63 64 65 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 25-year-olds 50-year-olds Expected effective retirement age
  11. 11. New retirees on an earnings-related pension as a proportion of all insured persons, 25–49-year-olds 1127 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 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 2017 2018 2019
  12. 12. New retirees on an earnings-related pension as a proportion of all insured persons, 50–69-year-olds 1227 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 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 2017 2018 2019
  13. 13. Changes to retirement on an earnings-related pension 13FINNISH CENTRE FOR PENSIONS | Effective Retirement Age • Number of persons retiring on an earnings-related pension was 64,940 in 2019, down by 4,000 from 2018 and 10,000 from 2017 • Number of persons retiring on an old-age pension fell by 4,400 – 9% drop from 2018: largest drop among the 62-year-olds (-1,900) and the 63-year-olds (-2,800); increase among the 64-year-olds (+900) – 44,500 persons retired on an old-age pension – 71% of all new retirees retired on an old-age pension 27 Feb 2020
  14. 14. Retirement on an earnings-related pension: some changes 14FINNISH CENTRE FOR PENSIONS | Effective Retirement Age • Number of new retirees on a disability pension up by 2% from the year before – 20,300 new retirees on a disability pension – Almost 30% of new disability pensions started as partial pensions • Minor changes in retirement rates – Women’s rates higher than men’s in younger age groups and among those over 63 • 12,300 persons took out a partial old-age pension in 2019 27 Feb 2020
  15. 15. 1527 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Expected effective retirement age: Aim and realisation 58 59 60 61 62 63 64 65 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 To achieve the goal at an even pace, the effective retirement age needs to rise each year by 0.15 years. Expectancy for a 25-year-olds Aim for 2025: 62.4 years Expected effective retirement age
  16. 16. Outlook (1/2) • The 2005 pension reform has clearly increased the effective retirement age • The 2017 pension reform will further push up effective retirement age – Raising the old-age retirement age reduced the number of new retirees on an old-age pension particularly in 2018, – The number of new retirees declined also in 2019, – The number of new retirees on a disability pension rose slightly, – The overall number of new retirees has declined significantly. • Future trends will depend on changes in behaviour – Intended retirement ages have risen – Retirement decisions influenced by multiple factors 16FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  17. 17. Outlook (2/2) 17 • Future trends will depend on economic outlook and changes in working life • In 2020, the number of new retirees is expected to decline from that in 2019 (to an estimated 63,000 persons) FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  18. 18. 1827 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Employment rates for the working-age population (15–64 years), younger people (25-34 years) and older people (55-64 years) in 2007–2019 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 2007 2009 2011 2013 2015 2017 2019 % 15–64-year-olds 25–34-year-olds 55–64-year-olds Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland
  19. 19. 1927 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Employment rates for persons aged 55–59 and 60–64 in 2007–2019 0 10 20 30 40 50 60 70 80 2007 2009 2011 2013 2015 2017 2019 2007 2009 2011 2013 2015 2017 2019 % Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland Employment rates in 2019: 55–59-year-olds 79.1% and 60–64-year-olds 54.2% Employment rates in 2018: 55–59-year-olds 79.1% and 60–64-year-olds 51.7% 55–59-year-olds 60–64-year-olds
  20. 20. 2027 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Employment rates for persons aged 55–67 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 55 56 57 58 59 60 61 62 63 64 65 66 67 % 2002 2007 2012 2017 2019 Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland
  21. 21. 2127 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Unemployment rates for persons aged 55–59 and 60–64 in 2007–2019 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 07 09 11 13 15 17 19 07 09 11 13 15 17 19 % Source: Official Statistics of Finland (OSF): Labour force survey, Statistics Finland Unemployment rates in 2019: 55–59-year-olds 6.3% and 60–64-year-olds 7.1% Unemployment rates in 2018: 55–59-year-olds 6.0% and 60–64-year-olds 8.2% 55–59-year-olds 60–64-year-olds
  22. 22. 2227 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Average employment rates of 55–64-year-olds in Nordic and EU countries in 2009–2018 0 10 20 30 40 50 60 70 80 90 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 % Iceland Sweden Norway Denmark Finland EU 15 EU 28 Source: Eurostat, Employment, Labour force surveys
  23. 23. Age group differences relative to employment trends among older people aged 55–64 (1/2) 23 • Employment rate improved in 2019 and was at its highest since 1990 – employment rate for working-age population 72.6% in 2019 (up by 0.9 percentage points since 2018) – older people’s employment has developed favourably in the 2000s – employment rate in age group 55–59 stopped at statistical record- high of 79.1% – employment rate in age group 60–64 rose steeply in 2019 and reached statistical record-high levels (54.2%, up by 2.5 percentage points since 2018) – employment rate in age group 25–34 fell by 6.3 percentage points in 2009–2016, but following turnaround in 2017 reached 78.1% in 2019, up by 1.3 percentage points since 2018 - but still 3 percentage points lower than the 2008 record of 81.1% FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  24. 24. Age group differences relative to employment trends among older people aged 55–64 (2/2) • Employment rates for older people in Finland remain lower than in other Nordic countries in 2018 – Second lowest Nordic figure recorded for Denmark, which is more than 5 percentage points ahead of Finland (gap closing in slightly in 2019) – EU15 countries lagging behind Finland by 5.1 percentage points 24FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020
  25. 25. 2527 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Expected length of working life for a 15-year-old 2007–2019 0 5 10 15 20 25 30 35 40 2007 2009 2011 2013 2015 2017 2019 Years Expected labour force participation Working life expectancy Calculation, source: Official Statistics of Finland (OSF), Labour force survey, Statistics Finland
  26. 26. 2627 Feb 2020FINNISH CENTRE FOR PENSIONS | Effective Retirement Age Working life expectancy for a 15-year-old 2007–2019 0 5 10 15 20 25 30 35 40 2007 2009 2011 2013 2015 2017 2019 Years Males Females Calculation, source: Official Statistics of Finland (OSF), Labour force survey, Statistics Finland
  27. 27. Length of working life in 2019 • Expected labour force participation in 2019 was 38.7 years – increase of 0.3 years from previous year – increase of 3.7 years in the 2000s – increase for men 3.4 years in the 2000s – increase for women 3.9 years in the 2000s • Working life expectancy in 2019 was 36.0 years – increase of 0.5 years from previous year – increase of 4.5 years in the 2000s – 36.2 years for men (up by 3.8 years in 2000s) – 35.8 years for women (up by 5.2 years in 2000s) 27FINNISH CENTRE FOR PENSIONS | Effective Retirement Age 27 Feb 2020

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