The Finnish National Youth Council has proposed “generational funding” to secure the future of the country’s earnings-related pension system.

In a position paper, the organisation said there are no young people at the negotiating table for the upcoming Finnish pension reforms, which are due to be revealed in January 2025. Therefore, various youth organisations in the country organised their own negotiations.

The reform is being undertaken to ensure the financial sustainability of the occupational pension system. The Finnish government has set the objective of the pension reform to strengthen public finances in the long term by 0.4 percentage points of GDP, equivalent to around €1bn.

The youth sector’s proposal, generational funding, would involve both current workers and pensioners. The youth sector's views on pension reform are strongly based on intergenerational fairness, reducing inequalities and preserving a sustainable pension system for future generations. The idea is that both younger generations, current workers and current pensioners should be involved in ensuring the sustainability of the pension system.

The sustainability of the pension system is currently under threat from declining dependency ratios, falling birth rates, weak economic growth, weak attachment of young people to careers, especially early in their careers, and the mental health crisis among young people.

"Pension reform must focus firmly on the future, not just on the interests of today's workers or pensioners. The system must treat different generations equally and fairly if it is to be widely accepted and sustainable, now and in the future. Young people must be consulted in the reform," Finnish National Youth Council advocacy expert, Titta Hiltunen, said.

Following the proposal, Finnish Social Security Minister, Sanni Grahn-Laasonen, called for intergenerational fairness in the pension reform.

"This process has certainly increased interest and awareness of the pension system among young people. Above all, the outcome of the negotiations is bringing intergenerational fairness into the debate and that is a really great and important value. We need to take seriously the concerns that young people have about the pension system and ensure that the Finnish pension system remains reliable from an international perspective," Grahn-Laasonen said.

"The pension reform that is currently underway is tackling important questions – how to achieve the required results while taking into account intergenerational fairness. For my part, I will make sure that the outcome of the youth negotiations is reported to the pension negotiators."

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