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To raise or not to raise?
Labour market organizations divided over minimum retirement age


Helsinki (20.02.2012 - Juhani Artto) The daily Helsingin Sanomat reported on February 11 that the board of the union confederation SAK has mandated its President Lauri Lyly to negotiate on the gradual raising of the minimum retirement age, if the average retirement age does not rise as planned.

The labour market organizations and the government have set as their common goal that the average retirement age should be raised to 62.4 years by 2025. In 2011, the figure rose by 0.1 percentage points to 60.5.

The present pension system allows wage and salary earners, as well as the self-employed, to choose when to retire between 63 and 68 years of age. The average retirement age is much lower than 63 years mainly due to the large number of people who become disability pensioners annually.

The news of SAK's new flexibility on this matter came as a surprise to many within and outside of the trade union movement. The reactions of the organized employers were positive but comments coming from individual unions clearly indicated hostility to the idea of raising the minimum retirement age.

The other two union confederations STTK and Akava were quick to confirm that they still see no reasons to raise the minimum retirement age. The results of the previous pension system reform are good and the average retirement age has risen even more rapidly than expected, they emphasized.

Also many of SAK's affiliated unions announced that their stand on the minimum retirement age has not changed from the 63 years of age. Riku Aalto, the President of the Metalworkers' Union, "floored" the plans to raise the minimum age in the daily Demari. TEAM, the trade union of workers in many industrial sectors, concluded that there is no need to raise the minimum age and stressed that SAK's negative stance on the minimum retirement age has not changed.

So, what lies behind the news of SAK sudden conversion, as it were - its willingness to be more flexible in relation to this contentious issue? The logic is that all other means other than raising the minimum retirement age must be tried first. If this does not lead - in the coming years - to the common goal then SAK is ready to consider its position on the minimum retirement age. This is how SAK's President Lyly explained last week SAK's approach.

Among these other means are raising the employment rate, making work places more attractive to aging employees and bringing to an end discrimination against older employees in the labour market. Last week union organisations also urged that the reasons for the large number of disability retirements annually be tackled in their comments on the retirement age dispute.

Negotiations between labour market organizations on future pension reform have remained dead-locked for a long time. Lasse Laatunen, director for legal affairs at the employers' EK, said on February 11 that SAK's new approach opens up possibilities for negotiations to move forward.

Lyly, in turn, said that he expects EK to alleviate its stand on the pension contributions that should be raised in the coming years. The contributions are paid partly by employers, partly by employees. Experts calculate that new decisions to raise the level of these contributions must be made for the period that begins in 2015.