Managing change by increasing employment rates, digitalisation and immigration.

CH – 08/2019

All pension systems must respond to the challenges posed by demographic change. An increasing proportion of pensioners in the general population and rising life expectancy mean that systems have to be adapted in order to ensure that they can continue to be financed in the future.

Finland is particularly affected by demographic change due to its very low birth rate compared to other European countries. Current figures on population statistics have revealed an unexpectedly sharp decline in the proportion of young people. As a result, the Finnish Centre for Pensions has updated its long-term forecast and determined that the contribution rate could rise to 30 percent in the projection period 2019 to 2085. This raises the pressing question of how fairness between the generations can be guaranteed in the future.

Heikki Tikanmäki of the Finnish Centre for Pensions points out that the financial prospects of the pension system are stable for the coming decades. Nevertheless, the low birth rate is a serious issue. The time has come to consider how demographic trends can be influenced. Anna Rotkirch from the Family Federation of Finland believes that this should include analysing the possibilities of further increasing employment rates in individual age groups and exploiting the opportunities offered by digitalisation and immigration.