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Finland

16 March 2017

Finland: generational debate on the evolution of pensions

A citizens’ initiative proposes that the evolution of the pensions should be based on the evolution of the salaries, and no longer on the evolution of inflation.

In Finland, citizens may propose to the Parliament the vote of laws based on their proposal, providing that a sufficient number of citizens sign it.

A citizens’ initiative has now been presented to the Parliament, proposing that the evolution of the pensions be based on the evolution of the salaries, and no longer on the evolution of inflation, which means that pensions would increase faster than they currently do.

The proposal is supported by certain political groups, such as the populist Finns Party (PS, Perussuomalaiset). Students and young workers are fighting the initiative, stating that this initiative threatens the funding of pensions at the expense of younger generations, and does not solve the problems related to poverty among the retired population, but would mainly support pensioners who already have quite a high income.

Due to the fragility of the pension system, the proposal will probably not be voted into action, but a surprise is not impossible. In this case, though, the existence of Finland’s State Pension Fund, a sovereign fund with a value of EUR 18.8 billion by the end of 2016 at, would be threatened.

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