Blogit

Hope in the numbers – good news from Finland’s pension system

October 20 marks the annual European Statistics Day. Established in 2016 by EU statistical authorities, the day highlights the role of good data and reliable statistics in informed decision-making. To celebrate the occasion, we at Ilmarinen took a closer look at our extensive data - and found plenty of good news.

Statistics often reveal problems, and rightly so. As an earnings-related pension company, our work involves identifying risks and finding ways to manage them. Today, however, we want to share another perspective: the power of statistics to tell positive stories about work ability and working life. Good news deserves to be seen, too.

There’s a lot that works well in Finland’s pension system - though it often goes unnoticed

Finland’s pension system and the related economic developments give us many reasons for optimism. Measured by pension assets, Finns are now wealthier than ever before.

Pension assets have nearly tripled over the past twenty years - from about €84 billion in 2004 to approximately €274 billion in 2024.[1] Compared to other EU countries, Finland’s pension funds are exceptionally large. If these funds were included in the calculation of national net wealth, Finland would be a debt-free country. However, the assets of the earnings-related pension system are earmarked for future pensions and cannot be used to finance public spending.

In many other EU countries, net wealth is negative because government debt exceeds the value of their funds. Finland’s prefunding approach has been a deliberate long-term choice - one that stabilizes both the economy and social security.

Wages have also grown significantly. In 2004, total wages in Finland amounted to about €60 billion, while in 2024 the figure reached €110 billion - nearly double.[2] At the same time, work ability has improved: the incidence of disability pensions has halved since 2002.[3] In the early 2000s, only about one in ten employees stayed at work until the lowest statutory retirement age. Today, that figure has risen to 70%.[4][5]

On top of that, Finns are living longer than ever - which means more years in retirement, even if some are still spent working. When the earnings-related pension system was established in the early 1960s, only about half of men were expected to live to the age of 65. Today, a newborn boy’s life expectancy is nearly 80 years.

Ilmarinen’s data gives further reasons for hope

Ilmarinen’s data covers about 36% of Finland’s private sector employees, and it reveals several other positive trends.

Young employees under the age of 35 are doing well: the number of disability pension applications in this age group has declined over the past five years.[6] Moreover, when it comes to permanent disability pensions due to mental health disorders, the incidence is about the same across both expert and manual professions - dispelling the myth that expert work is significantly more mentally burdensome.[7]

Finnish employees also show remarkable perseverance: one in three people who have reached the lowest old-age retirement age choose to continue working for at least six months, and after two years, 11% are still at work.[8] It’s worth noting, too, that older and recently retired workers represent a significant labor potential. Our studies show that as many as six out of ten new retirees would like to work part-time while drawing a pension. Hopefully, this valuable experience will be put to even better use in the future.

Expertise creates understanding

Statistics don’t appear on their own. While artificial intelligence offers new tools for data analysis and modeling, human expertise is still essential - both to understand the background of the phenomena and to interpret the numbers correctly. AI also doesn’t have access to all statistical data.

At Ilmarinen, we ensure that our data and statistics are reliable and correctly interpreted. We regularly publish fresh figures and indices to monitor developments in work ability, working life, and the economy. Through our employer services, companies can also compare their own development to that of their sector and gain valuable insights for managing work ability.

Statistics help us see the bigger picture and remind us that, by many measures, Finland’s pension system is in better shape than the often-dramatic headlines suggest. The reliability of the Finnish pension system was recently once again ranked the best in the world.[10] Behind these figures stand Finnish work, diligence, competence, and trust - and that, too, is good news to celebrate this Statistics Day.

Anssi Smedlund, Senior Specialist
Jouni Vatanen, Researcher
Simo Levanto, Occupational Psychologist

The authors work at Ilmarinen, interpreting and applying data in their daily work.