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| New Light on
Rehabilitation for the aged Is there enough money for pensions? Let's put age-related resources to work: Fifty-year-old Acts Differently from a Twenty-year-old
New Light on Rehabilitation for the aged Helsinki (10.10.1998 - Linus Atarah) An integral part of the National Programme on Aging Workers, launched earlier this year, includes a scheme for people over 45 years in working life to boost their working ability. A scheme of that nature falls within the overall framework and objectives of the programme which is aimed at improving the working conditions of ageing people so as to prolong their retirement age. Details of the measures in the project are yet to be worked out, says Heidi Paatero, Secretary-General of the Advisory Board of Rehabilitation at the Ministry of Social Affairs and Health. But according to her, it would differ in some respects from the traditional methods of rehabilitation because a central focus will be to identify some of the endemic factors in the working environment which inhibit people's performing capabilities or generate occupational illnesses. There is a worrying concern over the increasing high rates of early retirement in the Finnish labour force. Currently the average age of retirement is 59 years which is low by general European standards. It is therefore imperative to find out if unsuitable working conditions may be the cause of people trying to abandon their jobs early in life. The aim is to accumulate knowledge in the causes of work-related illness and disseminate the information. Therefore, a core task of the project in the initial stages will essentially be information dissemination activity, explaines Paatero. The practice of previous rehabilitation methods has been focused on training and changing individual people whenever they developed problems which impaired their working ability. A drawback in this individual-centred view of rehabilitation is that it does not go into the root cause of the problem of occupational illness. "When people easily get tired, bored or feel that they work excessively the question is not simply to train them in order to squeeze out more from them but to find out whether work is organised in a rational way", says Paatero. It is equally inadequate, as has been the practice, to send off a worker on holiday to find curative measures to his illness and return to the same conditions which may have generated the initial illness, says Paatero. Therefore in order to plug the gap in the traditional method, there will be a shift away from the individual as an immediate subject of rehabilitation and rather focus on gaining an insight into the way work is organised, in order to streamline to meet people's needs. Since the project is aimed at providing optimal working conditions for ageing workers there will be the need to streamline the organisational structures in the workplace, utilising the existing knowledge of old age-related impairements and relocate people according to the tasks which best suit their condition. "The whole project is very much a question of understanding the way ageing people work and to make working conditions suitable to their condition", Paatero stresses. In this connection she says that there will be the need to adress the issue of technology. In her opinion, there appears to be an insufficient knowledge in the application of technology. For instance, most of the time of office work is spent stucked behind computers and if it is found that this becomes strenuous for ageing people then the application of work techonolgy has to be re-examined. Paatero is also quick to point out that the term "rehabilitation" is actually a misnomer. "Experts do not even want to call it rehabilitation as such but rather improving the working ability in ageing people", she says. It is less to boost an individual's physical and mental capacity per se and more to create optimal working conditions in which people can perform to their best abilities. In that connection Paatero admits that the plans to be worked out in the training scheme will not be entirely new because concern over the issue of maintaining people's working ability emerged in the 1990s. It is also currently the subject of attention in another project known as "Ability of the Future" organised by the private insurance institutions. With these as background what needs to be done now is to increase awareness among employers and workers alike. Existing knowledge on how the work environment affects peoples' perfomances comes from the manufacturing sector where big firms with sufficient resources have conducted pioneering studies on the phenomena and have developed good models to provide workers with motivating and less stressful working conditions. But according to Paatero, the issue has not yet been paid sufficient attention in working situations in the white-collar sector where the working environment is essentially different. Consequently, there is a dearth of knowledge in this sector. People in white-collar jobs, for instance, frequently suffer from stress and other burn-out phenomena, have a constant feeling of working excessively and yet do not find a way out of the situation. Therefore part of the project's task should be to gain a proper understanding of white-collar work situation and find out what needs to be done in restructuring them. However, even if a greater awareness becomes widespread about providing optimum working conditions for ageing people, a central issue that needs to be adressed is to find out how different employers will implement the measures. Small scale employers, for instance, might not be able to afford the resources involved in introducing measures, and consideration will be given whether such employers ought to be supported. Such small scale employers will also need to be convinced that restructuring workplace organisation to meet the needs of ageing workers is ultimately economically beneficial because it will compensate for costs incurred from absenteeism due to work-related illness. So the whole programme has a great deal to do with attitude change to accept that fact that elderly people need to be retained in working life. As Kari Vinni, Secretary-General of the National Programme says, "People have to be convinced that ageing people have an extra value". Edited by Sheryl Hinkkanen Originally published in Socius 1-1998, the magazine of Ministry of Social Affairs and Health
Is there enough money for pensions? Helsinki (02.08.1998 - Rauno Pentti) Finns are currently engaged in a lively debate about the statutory pension insurance system and the financing of future pensions. Experts have presented a wide range of views and calculations in the course of this debate. Some experts believe that the present pensions system is adequate to meet future needs, while others are more doubtful and call for changes to the system. Conflicting visions as to how future pensions will be financed are worrying citizens. More than 80 per cent doubt society's ability to ensure adequate pension security in the years to come. As many as three out of four people believe that politicians don't take the issue seriously enough.* Carin Lindqvist-Virtanen, senior researcher at the Ministry of Social Affairs and Health, considers citizens' concern understandable. "Our present national pension system, which provides basic social security for all, was created in the 1930s, and the earnings-related pension system goes back to the 1960s. In the beginning, both schemes were very feasible, as many paid pension premiums but few people were retiring. Now things have changed. The population is ageing, and the number of people retiring is growing at an alarming rate. There is, quite naturally, cause for concern about the capacity of the pension system to withstand financial pressure," she explains. All the same, Lindqvist-Virtanen believes that the situation can be kept under control in the years to come. "If the national economy grows steadily and unemployment can be reduced to a reasonable level, in my view we have nothing to worry about. The impending retirement of the post-war baby-boomgeneration will not change the situation all that much." According to Lindqvist-Virtanen, the national pensions are appropriated from the State budget on the basis of a pay-as-you-go scheme. The funds needed for the employment pensions and the day-to-day pension expenditure are collected from employers and employees. "As far as the national economy is concerned, both the pay-as-you-go scheme and the funding scheme are of almost equal significance. The pay-as-you-go scheme, however, reacts more slowly to changes, as the monies available depend on the number of people receiving pensions, on the one hand, and on those paying pension premiums, on the other hand. The funding scheme is a more flexible system, as it means that one third of the funds available are set aside to balance the fluctuating need for financial resources," she says. Lindqvist-Virtanen adds, that the financing of pensions is based on distribution of the national economic' "pie". "In other words, the question is: Do we think that every one contributes to the result? Or do we think that the outcome is the result accomplished through the persistent efforts of only some people? I believe that the majority of Finns will continue to support a system based on equality, which also means that the economy of senior citizens should be safeguarded." There are, of course, people who aren't convinced by the optimistic calculations. Many experts and politicians have demanded higher returns on the monies invested by the pension funds. They have suggested, for instance, that the funds should adopt a more liberal investment policy. "The Government has, in fact, accepted the principle that pension funds may make investments on the open market and be more exposed to market fluctuations. That should increase the returns, although a greater element of risk is involved. To counteract the risks, the insurance companies administering pension funds should increase their equity as a buffer against stock market losses. Furthermore, we need to determine the upper and lower limits as to what share of the funds may be invested. These measures should prevent risky speculation with pension funds," she continues. Increasing the employee's share of the pension premium considerably has been suggested as a further means of reinforcing pension funds. It is thought that this would motivate employees to accumulate more earnings-related pension, and would increase their interest in profitable investments by pension funds. "Increasing the employee's share of the pension premium may have the desired effect, as long as we don't loose sight of future pensioners who cannot accumulate their own pensions, for whatever reason," Lindqvist-Virtanen points out. The uncertainty about the sufficiency of future pension benefits has also activated insurance companies, which are now competing fiercely in the sector of individual pension insurance schemes. These schemes, at least so far, are an attractive and popular alternative, thanks to their tax-deductible premiums. Now the Ministry of Social Affairs and Health is planning to change the taxation of individual pension insurance schemes, the intention being that individual pension insurance should lead to a reduction in the flat-rate basic benefit paid under the national pension scheme, as is the case with employment pension schemes. In addition, the working group appointed by the Ministry proposes that the retirement age granting the right to this tax deduction should be raised from 58 to 60 years. The pension insurance companies and the Taxpayers' Association of Finland alike have rejected the amendments proposed by the working group as unreasonable, whereas Lindqvist-Virtanen is in favour of the proposal, seeing it as a step the right direction. "It seems unfair to me to support individual pension schemes at the expense of tax revenues. It is particularly problematic when corporate dividends are used as premiums in order to minimise statutory pension expenditure and to benefit from the low capital tax rate," she explains. Lindqvist-Virtanen considers the idea of raising the retirement age according to the proposal particularly necessary in order to keep the situation under control in the future. Finns retire, on average, at 59 years of age. This is unusually early by international standards. What is more, merely four percent of the population works until the statutory retirement age of 65. This situation will be unsustainable in the future, in view of the potential shortage of labour," Lindqvist-Virtanen claims, continuing that, in her opinion, the average retirement age should be at least 61 if the situation is to remain tenable in the future. "Finns are still sticking to attitudes that prevailed in the 1970s, when the people who had experienced the hardships of the war wanted to retire as early as possible. That became the commonly accepted practice, which many continue to support, although life in general, and working conditions in particular, are better and people now live longer. It is time to readopt the earlier ideal that everyone has the right and the obligation to work as long aspossible," she says. Riitta Viitala, Deputy Head of the Department for Social and Health Services at the Ministry of Social Affairs and Health, agrees with Lindqvist-Virtanen. The comprehensive National Programme on Ageing Workers also aims at changing popular attitudes. "Implemented jointly with the Ministry of Education, this project supports measures whereby employers can motivate their employees to stay at work until retirement age. A common goal links this programme with two projects launched previously, Fitness at All Ages and Lifelong Learning," Viitala states. The National Programme on Ageing Workers aims primarily at making corporate management aware of the value of ageing workers as a labour resource. "The massive unemployed experienced in the early 1990s, and the changes in working methods and conditions, all contributed to the view that ageing workers are aburden. All sorts of schemes were invented with a view to getting rid of ageing workers. In consequence, ageing workers' experience and skills were belittled. We cannot afford to act that way any longer, especially as the baby boom generation is approaching retirement age," she continues. Although that situation should still be some ten years off, Viitala believes that the efforts taken now to change attitudes are not premature. "Many companies are already aware of the situation, and concrete measures are being taken to bridge the gap in knowledge and skills between young and ageing workers. If these measures succeed on a wide front, the situation will be under control, despite the fact that changing an attitude is always a slow process," she concludes. According to Lindqvist-Virtanen, a change in attitude can be achieved through the success of certain corporate model projects. "Training or an occupational health service in the long term can be the means for companies to improve the output of their ageing workers. Good results can often be proved with plain figures," she says. Viitala emphasises that the programme does not aim solely at increasing the efficiency of the ageing workers. "People are different. They do not all have the same stamina. That is why flexible, individual solutions will still be necessary, whether various pension schemes or work-related arrangements. The latter alternative does, however, call for a new kind of employment culture; one that accepts the delegation of easier or less strenuous tasks to ageing workers without involving the attachment of any stigma." *Source: An attitude survey carried out by Leijona, the life insurance company that is a subsidiary of Postipankki. Translated by Sheryl Hinkkanen Originally published in Socius 1-1998, the magazine of Ministry of Social Affairs and Health
Let's put age-related resources to work: Fifty-year-old Acts Differently from a Twenty-year-old Helsinki (10.07.1998 - Tiina Huokuna) The large age classes are a large question mark on the labour market. We'll all face problems unless the large age classes can be encouraged to stay active in the workforce longer, and thriving on the job. At the present time, only mini-sized age classes are coming on to the labour market. Their numbers aren't enough to replace the massive exit of labour from the workforce. There is good reason to want to keep people in their fifties active members of the labour market. Firstly, they are the country's first whole age class to have such a good level of education. Keeping the large age classes in the workforce also has an impact on the national economy. The pension system simply cannot flexibly accommodate the simultaneous early exit from the workforce of so many people. One critical point will be reached a couple of years from now. By the year 2000, the population between 50 and 64 years of age will have risen by 170,000 people while the number of people 24 to 49 years of age will have fallen by 150,000. During the five-year span ending in 2000, more Finns will pass their 50th birthday than the nationals of any other country in the world, relative to the population. These are facts we must live with and adapt to. The Finnish Institute of Occupational Health has presented another side to the situation. Ageing workers 45 years old or over have strong points too, which only need to be brought to the fore. A feature becoming increasingly apparent on the labour market is ageing workers' need for individually-tailored solutions. Professor Juhani Ilmarinen of the Institute stresses the folly of assigning 25-year-olds and 50-year-olds the same work. Professor Ilmarinen emphasises that management by age is neither a bag of tricks nor a complex structure involving major investments. "Management by age is a cheap solution. All it requires is that people making decisions adjust their thinking, adopt new values and change their attitudes. In the past, too, a good supervisor has striven to find individual solutions - an effort not made by a poor supervisor." "Good leadership has always been a natural talent based in leadership genes and reinforced largely during childhood and youth. If the right tendencies are lacking, no amount of book learning and courses can make the person into a leader. Our studies indicate that slightly under one in four has naturalleadership tendencies," Ilmarinen says. Ilmarinen shows curves, compiled at the Institute, which illustrate the principal threats facing Finnish working life. The disproportion is clear; the large age classes are truly large, the younger age classes small in comparison. There is a real need for the National Programme on Ageing Workers to act swiftly, as a high proportion of the large age classes is already in their fifties. "It takes years to train young people for new jobs. It is thus faster, cheaper, more humane and more sensible to improve the environment in which ageing people work," Ilmarinen points out. He is far from discouraged by the situation. Management by age offers one promising approach for dealing with these issues. Job content can be developed so as to be better suited to ageing workers. Ilmarinen continues: "Steps should be taken to keep individuals' mental, physical and social functional capacity as good as possible. This is one important part of the picture. Another factor, and by no means the least important, is up-dating professional skills. We at the Finnish Institute of Occupational Health believe that if matters are handled in the right way, people will be able to continue working until the current statutory retirement age of 65, in the future probably even beyond their 65th birthday." Youth is prized in Finnish society all too uncritically. In working life, this uncritical admiration is reflected in employers' desire to hire young, well-educated people with a little experience. In many fields, someone who has reached the age of 40 is already a bit too old - unless the person happens to be a guru in the field concerned. "Young people have their own strong points, but so do ageing workers over 50. Age discrimination is being countered, for instance, by making the employment of older people as economically attractive as the employment of young people," Ilmarinen explains. Skills should be kept up-to-date all the time. Many ageing workers encounter difficulties in meeting the demands of the information society. Nerves are frazzled, for example, by the computer. Lifelong learning at work, however, has come to stay; few can escape this. Nor are age discrimination and displacement of ageing workers from the labour market a joy to younger people. Instead, a heavier burden is placed on their shoulders. People elsewhere remain active in working life longer than in Finland. Moreover, the expertise of senior workers is esteemed better in other countries. Finnish working life excludes people unusually early, though according to statistics, Finns are not in any worse shape than others - Danes, for instance. A national weekly magazine, Suomen Kuvalehti, recently featured an article on the challenges to working life presented by ageing workers, and Ilmarinen received many revealing phone calls from senior managers. "For some reason, Finnish companies think that once a director has retired, his or her expertise is no longer useful. The younger people take it as a question of honour to manage without the retired director. Yet it's clear that many directors are still sharp at 75 years of age, and would be glad to perform some of the tasks included in their former career. Naturally these seniors would have to push themselves forward to be included, and this isn't the Finnish way of proceeding," Ilmarinen says. (Published originally in Socius Finland 1/1998)
Helsinki (24.10.1997 - Juhani Artto) The retirement age in the private sector fell throughout the 1980s even though there were no major reforms in that direction. This was due to a growing number of employees choosing or being forced into early retirement. The background to this lay not only in increasing health problems but also in employer policies of smooth reductions in the size of the workforce. Trade union organisations often agreed to these early retirement schemes when the alternative was to make long serving workers redundant. Now the trend has has been reversed. At the end of last year the average age of retirement was about 59 years. The figure is based on the retirement age of all present pensioners. At the end of the 1980s the figure reached its all-time lowest level 58,5 years. Experts estimate that the figure will rise to 59,5 by the year 2000.
In all, 78 billion Finnish marks was paid out in pension benefits in 1996. Pension benefits accounted for 41 per cent of the total social security expenditure and 13.6 per cent of the gross domestic product (GDP). Pension benefits were paid out to 1,233,653 people, of whom 513,840 were men and 718,813 were women. The distribution by type of pension scheme was as follows: Pensioners by age group: |
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| Source: Statistical Yearbook of Finland 1997 | ||||||||||||||||