The pension system in Finland: Institutional structure and governance
Finland’s retirement income system is both comprehensive and robust. Its design is consensus-driven, covers the entire workforce, provides adequate pensions, facilitates worker mobility, and is institutionally robust.
On the latter point, its institutions have clearly-defined roles, structures, and governance processes. The various components of the pension system are better integrated than in most other countries. It would continue to serve Finnish citizens well into the future even if nothing was changed. However, in my view, the employmentbased part of the system could be made even more effective if initiatives were taken to simplify it, to make it more cost-effective, and to refocus the purpose of the some 150 billion Euros of Finnish pension assets. These initiatives would address four issues: 1. How the system is financed, 2. How its pension institutions are structured, 3. How those institutions are governed, and 4. The relative emphasis on investment opportunities outside versus inside Finland.