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Young Finnish politicians want to roll back pensions

Perceived intergenerational inequality in Finland is eroding young people's faith in the pension system.

Amanda Pasanen ja Sameli Sihvonen, Helsinki, 19.08.2019
Green youth co-chairs Amanda Pasanen and Sameli Sivonen. Image: Antti Haanpää / Yle

The youth wings of several political parties say pensions should be cut in the name of generational equality.

The divide between young and old is raising debate among Finland's political youth groups. Young adults are questioning whether comfortable pensions will be out of their reach as they struggle to find steady jobs and get a foot on the housing ladder.

This summer the new government of PM Antti Rinne announced it would raise minimum pensions, a key election promise made by his Social Democratic Party (SDP). But that hasn't stopped the youth wings of the Greens, Centre — and even the SDP — from questioning the sustainability of the system as a whole.

In Finland, any discussion pertaining to lowering pensions has long been seen as political suicide as retirees are the country's most active voters.

Breaking a 'holy' promise

Meddling with pension payments is an unfathomable idea to many in Finland, but the Green youths told Yle that many young people have lost their faith in the system.

"We're interpreting pensions from a 1960s legal perspective which sees retirements — a social benefit — as personal property," Green Youth chair Amanda Pasanen told Yle.

"We should radically minimise the cost of maintaining pensions for the system to remain sustainable and fair for future generations," Sameli Sivonen, Pasanen's co-chair added.

The Green Youths point out that the Finnish and Swedish systems rely on opposite approaches for shoring up money in the face of dwindling state coffers. While Finland has resorted to raising the level of statutory pension contributions from wage earners, Sweden's response has been to cut pensions. The Swedish system includes a 'brake' mechanism on index adjustments that triggers when the economy weakens.

Suvi Mäkeläinen of the Finnish Centre Party Youth has also come out in favour of a 'brake' mechanism, saying it would mainly affect those with large pensions and not retirees on the lower end of the scale.

Vesa Rantahalvari of the Confederation of Finnish Industries (EK) said that while slowing down index adjustments could be a good way to shore up funds, he said his organisation is primarily focused on raising Finland's falling birthrate, increasing work-based immigration and improving employment overall.

Meanwhile Sinikka Näätsaari who heads pension policy matters at the Central Organisation of Finnish Trade Unions (SAK) pointed out that recent retirement age hikes have increased the pool of people paying into the system to ease the state's burden.

But Mikkel Näkkäläjärvi of the SDP's youth organisation is not convinced that increasing the contribution base will be enough.

"People born during or after the 1970s are definitely not winners in the system," he said. "The next pension reform will have to address generational equality."

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