Three major labour-market groups have approved a pension reform plan negotiated with employers’ groups and backed by the government of Prime Minister Petteri Orpo (NCP).

The boards of the Central Organisation of Finnish Trade Unions (SAK), the Finnish Confederation of Professionals (STTK), and the Confederation of Unions for Professional and Managerial Staff in Finland (Akava) all gave their blessing to the plan on Monday.

Labour market organisations reached a compromise deal on pension system reforms last Monday.

The Orpo cabinet’s economic policy committee decided later in the week that the agreement met the requirements set by the government. It aims to strengthen public finances by a billion euros annually through pension reforms while securing the long-term financing of earnings-related pensions.

Pension firms allowed more investment risk

Labour market leaders say that the reform will have minimal impact on the average retiree.

The reform aims to ensure that pension insurance companies receive a better return on their investments by allowing them to take on more risk.

According to documents seen by Yle, the firms will be allowed to put up to 85 percent of their investments into equities, up from the current maximum of 65 percent.

The change is significant because long-term returns from the stock market have been clearly higher than those from government bonds, for example. At the same time, the risks are also higher, experts note.

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