TELA: Ageing Finland can’t afford prolonged unemployment

first_img“I am glad that the pension funds have been able to grow undisturbed and that their accumulated investment returns have been remarkably good in recent years,” said Siimes, adding that this had led to buffers in the system that were strong enough to withstand the really bad days the pandemic had brought.Market values of pension assets had fallen sharply, and direct income flows from many investments would also diminish as the economy declined, Siimes said.But she pointed out that only part of Finland’s occupational pensions were financed from the funds and their investment income, with most of the funding still coming from contributions levied on the salaries of people currently in work.“The increase in redundancies and the rise in unemployment will also reduce the income streams from them, at least for a while,” she said.Siimes said the near future was still shrouded in fog, but that it was clear that the ageing of Finland’s population would continue after the epidemic.“In addition, we are already significantly older as a nation than during the recession of the 1990s,” she said. So being able to pay pensions normally today was not enough, she said, adding that this had to continue to be the case for years to come.More than a quarter of Finland’s population were already pensioners, and the number of retirees was estimated to grow by well over 200,000 during the 2020s, the CEO noted.“It´s important to act to avoid a prolonged recession, because now – due to the ageing of the population – we cannot tolerate prolonged unemployment to the extent we did in the 1990s,” Siimes said.Looking for IPE’s latest magazine? Read the digital edition here. Finland’s partly-funded occupational pension system has enough in buffer reserves to weather the current phase of the COVID-19 crisis, but given the country’s ageing population, it is essential that the economy makes a swift recovery, according to the head of the sector’s lobby group.In a media column, Suvi-Anne Siimes, chief executive officer of TELA, said: “We need to be able to invest earnings-related pension funds tomorrow too, and a rapid economic recovery is absolutely essential.”A revitalised economy was essential for jobs, livelihoods and people’s everyday security, as well as to help strengthen the financing of pensions, she wrote in Finnish newspaper Demokraatti.Even though the coronavirus epidemic had been rattling the economy in Finland and abroad for weeks, she said, thanks to the country’s well-managed pension system, pensions were being paid to everyone entitled to them in the normal way.last_img

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