The number of people retiring on a disability pension in Finland has fallen among people aged between 50 and 60, with full disability retirement declining over a longer period, a study by the Finnish Centre for Pensions (ETK) has found.

The research, Incidence of disability retirement among persons aged 50 and over by birth cohort, saw the Finnish Centre for Pensions senior researcher, Mikko Laaksonen, analyse the changes in disability retirement rates for people aged 50–63, focusing on different birth cohorts.

The research revealed that retirement on a partial disability pension declined for those born in the early 1960s.

In addition, retirement on a full disability pension has declined among the over-50-year-olds since the beginning of the 2000s. Meanwhile, the take-up of a partial disability retirement pension increased until 2019 but has now levelled off.

Laaksonen said that reviewing changes in disability retirement by birth cohort offered new insights into these trends. For example, younger cohorts could be healthier than older ones and retire on disability pensions less frequently or at an older age.

Laaksonen explained that if this is the case, the differences between different years mainly reflected the differences in disability retirement of varying birth cohorts.

Retirement on a disability pension has “strongly” declined among people aged 50–60, starting with those born in 1953. The trend for full disability retirement mirrored this trend.

However, the rate of partial disability retirement has increased among those aged 57 and people born in the early 1960s but has since decreased.

In particular, for people over 60, retirement on a partial disability pension has continued to rise. It is not currently possible to track the youngest cohorts into their old age.

Furthermore, retirement on a disability pension was less common in younger cohorts compared to older cohorts at the same age. This trend could be seen in both full and partial disability pensions.

The average age of disability retirement rose for people over 50, with younger age groups possibly reaching the same disability retirement rates before age 63 as older age groups.

Despite this, the research suggested that the number of new disability pensioners among younger age groups is expected to be lower.

Laaksonen said it was “noteworthy” that retirement on a partial disability pension has decreased among those under 60 but has continued to rise for those aged 60 and over.

Given this, he explained that this increase would have to remain “substantial” for the total number of partial disability retirements among young age cohorts not to decline.

The 2017 pension reform, which raised the old-age retirement age, also contributed to disability retirement trends for those over 60. The retirement ages are higher for the younger cohorts than older ones.

Laaksonen also found that full disability retirement has decreased in both private and public sectors but strongly in the private sector.

The decline in partial disability retirement applied to both sectors but is more prominent among younger cohorts in the private sector.

The research showed that the frequency of full and partial disability retirement varied between sectors due to different criteria for disability, differences in the experience rating model, business lines, and occupational structure.

---