Finnish Centre for Pensions


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Finnish Centre for Pensions

  1. 1. Finnish Centre for PensionsThe Expert on Earnings-related Pensionsfor More than Half a Century4 June 2013
  2. 2. Earnings-related Pension- Most Important Pension in Finland (1/2)• Statutory pension provision is the most significantcomponent of Finnish social insurance• Statutory pension security comprises earnings-relatedpension, residence-based national pension (Kela) andguarantee pension• Provides security for old age, in case of disability ordeath of family’s providerFinnish Centre for Pensions 2
  3. 3. Earnings-related Pension- Most Important Pension in Finland (2/2)• Pension scheme managed by pension insurancecompanies, industry-wide and company pension funds,as well as special pension providers since 1962• The Finnish Centre for Pensions, a joint statutory body,produces services for all parties to the pension scheme• Entire workforce aged 18-68 insured(approx. 3 million people)• Majority of pensioners on earnings-related pension– 1.5 million pension recipients in total– 1.4 million pensioners on earnings-related pensionFinnish Centre for Pensions 3
  4. 4. Total Pension in 20124Finnish Centre for Pensions
  5. 5. Finnish Centre for Pensions 5Sickness insurance4.24Accidentinsurance 0.44National pension 2.50Unemploymentinsurance 3.30Employees’ group lifeinsurance 0.03Earnings-relatedpension 19.49Other 0.64Social Insurance Expenditure 2010 EUR bnPensioninsurance22.60
  6. 6. OTHERSNATIONALEARNINGS-RELATED PENSIONPublic sectorPrivate sectorPension Statistics• Average retirement age: 60.5 yrs• Number of pension recipients: 1,483,000• Average total monthly pension: EUR 1,415Finnish Centre for Pensions 6
  7. 7. Earnings-related Pension Scheme• Partially funded• Defined benefit• Centralised scheme with decentralised administration– principle of the last insurer– contributions collected, funds administered and pensions paid byseveral pension providers• Based on tripartite governance– Social partners negotiate the principles of pension reforms– Government makes its proposal to ParliamentFinnish Centre for Pensions 7
  8. 8. Coverage of the Pension Scheme• No upper limit tocovered income• No pension ceiling, i.e.all income accrues apension• Occupational andpersonal privatepensions play a minor(although increasing)roleFinnish Centre for Pensions 8
  9. 9. Earnings-related Pension Provision –Legislation, Supervision and ExecutionFinnish Centre for Pensions 9Ministry of FinanceFINNISH CENTRE FOR PENSIONSPension insurancecompaniesTyEL, YEL (7)Company pensionfunds TyEL (14)Seafarer’sPension FundMELIndustry-widepension fundsTyEL, YEL (6)KevaKuEL, VaEL, KiELInsured and policyholdersFinancial Supervisory AuthorityMinistry of Social Affairs and HealthFarmers’ SocialInsuranceInstitutionMyELNational Audit Office of FinlandOther public parties:The Orthodox ChurchBank of FinlandThe regional government of ÅlandExecution of Earnings-related Pension
  10. 10. Finnish Centre for Pensions –Guardian of Earnings-related Pensions• Finnish Centre for Pensions founded on 5 October 1961• Central body for the earnings-related pension schemein Finland• Earnings-related pension scheme managed by pensioninsurance companies, company pension funds,industry-wide pension funds and special pensionproviders has been in force since 1962• Further information (in FI, SW, EN) on the FinnishCentre for Pensions and earnings-related pensions inFinland– for experts in the field– for citizensFinnish Centre for Pensions 10
  11. 11. Finnish Centre for Pensions – StatutoryInstitution• A statutory institution but not part of governmentadministration.• Administrative bodies:– Board of Representatives, chairman and deputy chairman of theBoard of Directors appointed by the Ministry of Social Affairs andHealth– Board of Directors includes representatives from labour marketorganisations, the State and earnings-related pension insurancecompanies– Headed by the Managing Director• Operating expenses financed with earnings-relatedpension contributionsFinnish Centre for Pensions 11
  12. 12. Finnish Centre for Pensions - OrganisationFinnish Centre for Pensions 12Managing DirectorJukka RantalaDirectorRiitta KorpiluomaDirectorMikko KauttoDirectorKatri RaatikainenCommunicationsDirectorKati KalliomäkiREPRESENTATIVESBOARD OF DIRECTORSLabour market organisations,Ministry of Social Affairs andHealth, Pension InsuranceCompanies represented• HR & Development• Legal Services• Customer Information• Supervision• InternationalPension Matters• Planning• Statistics• Research• Communications• Register Services• Information Management• Developmental Support• Administration
  13. 13. Finnish Centre for Pensions- Provider of Scheme’s Common Services• Provides services common to the decentralisedearnings-related pension scheme– Assessments and projections: earnings-related pension provisionand insurance contributions in correct proportions– Research and statistics: data and material for the benefit of theentire scheme– Registers: pension accrual based on correct earnings data– Supervision: prevents grey economy– Legal, actuarial and customer information services– Training and communication relating to pension provision– International services: earnings-related pension insurance validabroad and applying for pensions from abroadFinnish Centre for Pensions 13
  14. 14. Finnish Centre for Pensions - Aims• Reliable and current expert data is used in social debateand decision-making concerning pension provision• Earnings-related pension provision and its significancefor the individual and society is known• Efficient implementation of earnings-related pensionprovision and developed online services• Increased customer satisfaction with our servicesThe Finnish Centre for Pensions 14
  15. 15. Finnish Centre for Pensions- Financing and Personnel• Total annual expenses approx.EUR 44 million- Circa 8 per cent of the administrativeexpenses of the earnings-relatedpension scheme used to finance theoperations of the Finnish Centre forPensionsFinnish Centre for Pensions 15• Ca 350 employees- More than half have an academic degree• Average age 45 yrs and 80 per cent women
  16. 16. Finnish Centre for PensionsFinnish Centre for Pensions -Customers and Interest Groups16Managers of earnings-related pensionEarnings-related pensionprovidersInternational insuranceinstitutionsAppeal bodiesIMPLEMENTATION OFPENSION PROVISIONDecision-makersParliament and other politicaldecision-makersMinistry of Social Affairsand HealthOther ministriesLabour market organisationsEVALUATION AND DEVELOPMENTOF PENSION PROVISIONThe insured andpolicyholders(in special cases)Media and society Research andeducationalinstitutionsFINNISHCENTRE FORPENSIONSOther social security andinsurance providers andauthoritiesKelaUnemployment securityprovidersTax authorityOthers
  17. 17. Thank you!