Hmm. How do you accrue pension from a higher education degree? At least I haven’t accrued any…
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OK, learned something new today (too). Time to cut out such nonsense.
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I bet that 95% of people who have earned pension from a degree don’t know it themselves. In that sense, it’s an easy target for cuts, as hardly anyone would even realize they had lost some benefits.
Mind you, this cut too would primarily target young people, while Määttänen is simultaneously worried about intergenerational injustice…
As for the Finnish pension system, the game seems to be lost. All the cuts (which must be made) will affect the people who are not yet involved in making the decisions.
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I personally accept this cut to the pension accrual from higher education degrees, as long as corresponding cuts are also made elsewhere. It would be better to redirect this money to funding the education system itself in an earmarked manner.
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They probably don’t know, I didn’t know myself either. The reason is likely that it doesn’t show up on the earnings-related pension record.
My first thought was that this must be propaganda preparing for future decisions 
But maybe that’s just how it is. I’ve been living in some bubble of my own…
Finns plan to retire later and later
According to economist Satu Nivalainen from the Finnish Centre for Pensions, it is good news for the financial sustainability of the pension system that the intended retirement age has risen slightly faster than the minimum retirement age.
Based on previous research, it is known that retirement intentions predict the actual retirement age quite reliably.
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The discussion is at quite an absurd level if we’re talking about accruing pension from studies. We’ve gone very far toward state socialism.
As for intergenerational equality and the “terrible oppression” newer generations have to endure, let me just remind you that my generation got their first mobile phones around the age of 25. And I ate a proper steak for the first time at age 20. In my childhood home, which was a perfectly normal home, we mainly ate minced meat. We went to a restaurant once a year at most. There are so many sides to these things.
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The fact that you feel your childhood was tougher than that of later generations doesn’t remove the inequality of the pension system. In principle, everyone should be responsible for their own pensions, and any surplus should be able to be passed on as an inheritance. Everything else is that socialism you despise, including a pension system that treats generations unequally.
I do support removing the pension accrual earned from studies, even though I would personally benefit from it right now. Widow’s pensions should also be abolished for everyone, including those currently receiving them.
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I’m not sure which exact generation you are referring to, but Finland’s total fertility rate (TFR) fell below the replacement level (2.1 children) after women born in 1939–1940. Since then, every Finnish generation has had too few children from the perspective of the pension system’s sustainability, meaning practically all post-war age groups have something to answer for. One could even say that the entire pension system was built on completely delusional assumptions, as future generations were always made to foot the bill for the previous ones’ pensions, even though the birth rate was in continuous decline.
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I don’t know what this “looking in the mirror” for entire generations is all about. Personally, I support significant cuts to pensions so that the sustainability of the system improves, followed by a transition as quickly as possible to a fully funded system. Not that this opinion is worth much, though.
On the other hand, it’s easy for me to talk when I already have my FIRE pot together and have earned a 6k/month pension, having paid a few million into the system along the way without ever receiving a thank-you note.
Regarding my childhood, I have no complaints. Material wealth was very scarce by today’s standards, but it was fun. This discussion and the pointless wallowing in generational conflicts also revolve around material things.
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I wouldn’t summarize this discussion as revolving “around material things.” What is emphasized more here is intergenerational fairness and justice; it is difficult to turn it into a generational conflict when looking at the matter objectively.
Painful decisions lie ahead, but the fact that those painful decisions apply to everyone is precisely what intergenerational equality is about.
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To clarify, I don’t support the current system either. By “looking in the mirror,” I was referring to the fact that the larger and older generations were involved in creating a system whose sustainability is based on a certain birth rate, yet they did not contribute to this themselves by having enough children.
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Yes, that is visible and can be found as a total sum under “Pension accrued from non-salaried periods,” and then further down there is “Non-salaried periods annually,” where you can see what has been included in that. For me, it shows two university degrees and parental allowance.
I believe this addition came with the 2005 pension reform, meaning that before then, degrees did not accrue pension, nor did work done under the age of 23. My pension has also been reduced by the life expectancy coefficient, by a few hundred euros in my case. I won’t lose any sleep if nothing accrues from education, but the life expectancy coefficient has already eaten that benefit several times over.
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It somehow feels unreasonable that younger generations earn pension credits for their studies, accruing pension while still wet behind the ears, etc. For the sake of pension “sustainability”, the situation should be the other way around; future pensions must be cut, and current ones as well. I wonder which would be easier, or is it political suicide?
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Yeah, finished my degree in 2000 so nothing shows up. Jobs that didn’t accrue pension are visible; it seems there were quite a few of those too.
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Out of curiosity, I also went to check my own pension statement.
At least in my statement, I don’t have any section like “pension accrued from unpaid periods.” The section “social benefits that have accrued pension” is there (though it’s a very insignificant column, luckily…
). As I understand it, this column includes unemployment benefits, etc.
A university degree is indeed listed, but it’s not clear how it would affect the pension. Or would this “higher education bonus” then be added on top of the paid pension?
Anyway, it’s useless hair-splitting to even consider such a thing at this stage of my career, as the pension system will have time to be scrapped several times before I get to enjoy its fruits (one just has to hope the fruits aren’t moldy by then 
).
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@elbi if I recall correctly, it was just a single line on that statement, not its own heading, so it’s not that easy to spot. You don’t get any major boost to your pension from those; I had a couple of degrees + children, so apparently something comes from parental leave, and the total amount was in the double digits… for me, it was equivalent to less than a year of working.
That’s true, it’s best to stress later. I believe the system will hold up well enough, but this “degrees accumulate – or they don’t” type of discussion shows how poorly decisions stand the test of time (and we are talking about predictable pensions). After “this solves everything” type measures like life expectancy coefficients or gradual increases in the retirement age, a new discussion always starts up again quickly. I interpret Määttänen to mean that many other avenues have already been exhausted—for example, raising the retirement age no longer provides an impact, higher accrual rates have been phased out—so the focus turns to pensions already in payment + side branches like degrees.
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That eternal grumbling from the youth that “those people get a better return on the earnings-related pension contributions they’ve paid”…
“Kauppalehti asked the Finnish Centre for Pensions (Eläketurvakeskus) for calculations on the ratio of paid pension contributions to pensions received for people of different ages.
The calculations from the Finnish Centre for Pensions reveal the well-known fact that there are significant differences between age groups.”
YES, THERE ARE DIFFERENCES, but from 1968 to the present, the return is at a very similar level in the range of 1.68–1.62.
Those born in '68 are now 58 years old.
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Good table. Surely that’s inflation-adjusted, isn’t it? Still, an absolutely abysmal performance compared to investing your pension money yourself for 40 years. So, a 68% total return on pension funds for someone born in 1983, but by investing in index funds yourself, the returns would be in a completely different league.
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