confederations agree on how to extend work careers by one year
Helsinki (03.04.2012 - Juhani Artto) On March 22 labour market
confederations were finally able to agree on a substantial set of measures
that will extend work careers. Experts estimate that the agreement will
careers on average by one year.
Another positive outcome of the agreement is that the expected extension of
work careers will serve to balance the state budget, in the long-term, by
over EUR 2
billion per annum.
The agreement also paved the way for the government to refrain from any
cuts in social spending. The labour market confederations agreed on the work
career agreement at the 11th hour prior to a meeting where the government
was due to
make (and also made) decisions on a budget framework for several years to come.
The agreement raises pension contributions - paid by both employers and
employees - in 2015 and again in 2016. The contributions to be paid by both
(employers and employees) are set to rise in these consecutive years by 0.4
percentage points. These
increases are necessary to safeguard the financing of future earnings-based
pensions. At first the employers resisted this rise in contributions.
Small changes to the pension system
The labour market organizations have negotiated many years on how to extend work
careers. Three years ago they had agreed in principle to
this goal but
had ever since disagreed seriously on the means to bring it about.
The employers' number one demand was that the minimum age of
retirement should be raised from the present 63 years to 65 years. This 63
year minimum age
remains untouched in the agreement but the reform package will make it, in
other ways, more difficult to become a pensioner. The option to become
an old-age pensioner prematurely will be closed in 2014 and the minimum age
part-time pension will be raised from the present 60 years to 61 years in
Negotiations on pension reform(s) will continue. The parties set the year
as their deadline for reaching a common understanding on the next stage of
reform. The negotiations will cover age limits, early retirement schemes,
pension contributions and several other issues.
Measures to make employees willing and able to work longer
The agreement includes many initiatives to improve working life so that
employees are able and willing to remain in working life longer. Measures
are expected from, among others, the earnings-based pension institutions and
company health care organizations. And at work places, the application of
programmes is to be safeguarded by preparing individual career plans. Late
last year the parties agreed on the creation of age programmes at the
Easier eligibility in respect of earnings-related
Eligibility for earnings-based unemployment benefits is also to be made
In future, a six months' work period (instead of the present eight months)
will be enough to make one eligible for earnings-based unemployment
the other hand, a work career which is of less than three years duration
only entitles one to
pay related benefits for 400 days (instead of the present 500 days).