Over 60% of Finns would prefer immigration as a way of supporting pension financing, according to the results of a recent survey by the Finnish Centre for Pensions (Eläketurvakeskus, ETK).
The preference for employment-based immigration was preferred over raising pension contributions for either employees or employers or taking on more investment risk.
“Had there been only one option to strengthen pension financing, slightly more Finns would have selected increasing employment-based immigration compared to the 2023 Pension Barometer”, explained ETK economist Sanna Tenhunen.
An even greater majority (80%) reject the notion of cutting pensions. The second most popular option was raising contributions, which some 30% of respondents see as a good or fairly good option. Another 30% consider raising investment risk as a good or fairly good option, with almost equally many considering it at least a fairly bad choice, making the option a divisive one.
The survey, Pension Barometer, conducted in March 2024, polled just over 1,000 Finns about their attitude towards pension financing. This is a hot topic as the government wants to strenghen the public economy by 0.4% of GDP for the long term, equallying approximately €1bn annually.
A working group has been tasked to come up with solutions for safeguarding and stabilising pensions for the future. The pension industry in general is in favour of both increasing immigration and investment risk as many think that touching the benefits or contribution levels will be a hard pill to swallow for the social partners and likely cause delays to any reform decisions and unwanted consequences down the line.
The survey also looked into pension knowledge amongst Finns. According to ETK, “it highlights a growing public understanding of the pension system’s intricacies and a stable trust in its management. These insights are crucial for policymakers and the public alike, as they navigate the challenges of ensuring financial security for retirees now and in the future”.
Trust in the Finnish pension system remains robust, with around 70% of Finns expressing confidence in the system and the management of pension assets. This trust level has been consistent with the previous year’s findings.
“We hope that as many as possible know the basics about pensions. That would allow them to make informed decisions both in their working life and at retirement based,” ETK head of research Susan Kuivalainen pointed out.
Perceptions of pension adequacy are more divided. Approximately 50% of respondents believe that pensions provide a reasonable income for current retirees and are optimistic about the sufficiency of funds for future pensions. This represents a slight increase from the 2023 Pension Barometer.
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