Sign up for our newsletter ⟩
News |

Centre chair springs higher retirement age surprise

The outgoing finance minister made the announcement moments before presenting her replacement, Matti Vanhanen.

Puheenjohtaja Katri Kulmuni ja Keskustan esitys uudeksi valtiovarainministeriksi Matti Vanhanen.
Centre Party chair and recently-resigned finance minister Katri Kulmuni and Matti Vanhanen at the Centre Party's press conference on Monday morning Image: Mikko Stig / Lehtikuva

Centre Party chair and recently-resigned finance minister Katri Kulmuni unexpectedly announced on Monday morning a proposal to raise Finland's retirement age.

Speaking at a Centre Party press conference announcing the party's nominee for her former job, Kulmuni said the country was facing difficult decisions on how to pay for the state's increasingly large budget - such as raising the retirement age, significantly raising the government's employment target and reforming unemployment benefits.

She said those measures were the only way Finland could avoid raising taxes and prevent cuts to services. However raising the retirement age was a new addition to that list, and a series of pension reforms that involved increasing the minimum age of retirement was already implemented a few years ago.

Raising the retirement age is a sensitive topic which will require trilateral agreement with labour market organisations, according to Jaakko Kiander, director of the Finnish Centre for Pensions.

Kiander said that he had not previously heard of any new plans to increase the retirement age, noting that major pension reforms had recently been carried out.

"And the change to pensions was just agreed upon," Kiander noted.

Pension age increased in 2017

Kulmuni resigned from her position as Minister of Finance on Friday but retained her post as chair of the Centre Party. She left the ministry's top job due to persistent questions regarding the procurement of services from a communications consultancy firm.

Standing next to her at Monday's press conference was veteran Centre Party heavy-hitter and former prime minister Matti Vanhanen, the country's incoming finance minister.

During his tenure as premier in 2009, Vanhanen proposed raising the country's retirement age to 65. As he tried to move the issue forward, Vanhanen was faced with resistance from labour unions and citizens as well as opposition parties.

However, nearly a decade later, significant pension reforms came into force in 2017, increasing the earliest eligibility age for old-age pension by three months per year until the year 2027, starting with people born in 1955.

For workers born after 1964, the retirement age will be linked to future life expectancy. For example, people born in 1970 will be eligible to retire one month short of their 66th birthday, while people born in 1995 will have to wait until they are over 68 years old to retire. Early retirement is still possible, but comes at the cost of lower monthly pension payments.

Latest in: News


Our picks