Earnings-related pensions financed through insurance contributions
Private-sector earnings-related pensions are financed mainly through
contributions levied from employers and employees. Furthermore, the
pension expenditure for each year, pension funds accumulated from the
contributions of previous years, interest yields on these funds, as well as
the contribution paid by the Unemployment Insurance Fund are used to finance
earnings-related pensions.
The employer is liable to arrange pension provision for its employees by
taking out insurance with a pension insurance company or by establishing an
industry-wide or a company pension fund. Self-employed persons take out
insurance with a pension insurance company or a pension fund which is engaged in
insurance business under the Self-Employed Persons' Pensions Act (YEL).
Statistics on earnings-related pension contributions paid by companies have
been compiled in a statistics report published (in Finnish) by the Finnish
Centre for Pensions.
The level of contributions paid by the employers varies according to pension
act and company size. Contributions paid by the employees constitute a certain
percentage of the wages. The pension expenditure for self-employed persons
and farmers is partly financed through the national budget. The State pays the
share of the self-employed persons' pensions which is not covered by the
contributions. Furthermore, the State finances one-third of the seamen's
pensions.
The Ministry of Social Affairs and Health annually confirms the
private-sector pension contributions and the coefficient for covering of old-age
pension liabilities as well as the technical rate of interest.
Pension contributions in 2010
Private sector
Public sector
Pension contributions in 2009
Private sector (pdf)
Public sector (pdf)
Social insurance contributions