The administration of the earnings-related pension system is decentralised to several authorised pension providers. In the private sector, statutory earnings-related pension insurance is handled by pension insurance companies, special pension insurance providers, company pension funds and industry-wide pension funds, as well as by public sector pension providers.

Authorised pension providers are responsible for granting and paying earnings-related pensions and for advising insured persons on pension matters. Employers and self-employed persons pay their earnings-related pension contributions to the pension provider of their choice. Employees cannot choose their pension provider. The content of the pension is the same, regardless of the pension provider.

Because of the decentralised administration, certain functions are handled centrally by a statutory co-operation body, the Finnish Centre for Pensions. Together with the authorised pension providers, the Finnish Centre for Pensions participates in the preparation of instructions and laws.

The Ministry of Social Affairs and Health is in charge of drafting the earnings-related pension laws. The Financial Supervisory Authority supervises private sector earnings-related pension providers and the special providers for farmers and sailors.

Keva, the public sector pension provider, is an independent institution governed by public law. Its operations are based on the Public Sector Pensions Act (JuEL) and the Act on Keva (KevaL). The operations of Keva are governed by the Ministry of Finance, the Financial Supervisory Authority and the National Audit Office of Finland (NAOF). The Financial Supervisory Authority supervises the planning and pension asset investments of Keva.

The national pension scheme is administered by Kela. Kela is responsible not only for the national pension and the guarantee pension, but also for other social security. The pensions paid by Kela are financed by the state.

Last provider pays out the earnings-related pension

Although the earnings-related pension scheme is decentralised to several parties, one pension application is enough. The application may be handed in or sent to any authorised pension provider, local Kela office or the Finnish Centre for Pensions.

According to the so-called principle of the last institution, the pension provider where an individual’s last employment contract or self-employment was insured grants and pays out the pension.

The last institution calculates the total amount of the pension that has accrued from different employments, handles the payment of the pension to the pension recipient and levies the pension shares of the other pension providers via the cost clearing handled by the Finnish Centre for Pensions.

Authorised pension providers handle private-sector pensions

In Finland, the authorised pension providers, special pension providers, company pension funds and industry-wide pension funds are responsible for the implementation of private sector statutory earnings-related pensions (under the Employees Pensions Act and the Self-employed Persons’ Pensions Act).

The Farmers’ Social Insurance Institution and the Seafarer’s Pension Fund handle the earnings-related pensions in their own fields. These institutions operate based on separate statutes: the Farmers’ Pensions Act and the Seafarer’s Pensions Act.

Keva main provider of public-sector earnings-related pensions

The pensions of public-sector employees are regulated in the Public Sector Pensions Act. In 2017, the Local Government Pensions Act, the State Employees’ Pensions Act, the Evangelical Lutheran Church Pensions Act and the regulations concerning the employees of Kela merged into this one public sector pension act.  As of 1 January 2021, the employees of the Bank of Finland are also covered by the Public Sector Pensions Act. The employees of the Orthodox Church and the regional government of Åland have their own pension regulations.

Keva implements the earnings-related pensions for employees in the municipal sector, the State, the Evangelical Lutheran Church, the Bank of Finland and Kela. Keva is also responsible for the financing of local government pensions. The State Pension Fund of Finland is responsible for the financing of state pensions. The Evangelical-Lutheran Church, Kela and the Bank of Finland are liable for the pensions of their employees.

Depending on their position and the date on which their employment begun, the employees of the Orthodox Church are insured under the State Employees’ Pensions Act, the Employees Pensions Act or the Orthodox Church Act. Depending on which act is applied, the pensions are implemented by an earnings-related pension provider, Keva or the Central Church Fund of the Orthodox Church.

The pensions of Åland regional government employees hired before 1 January 2008 are arranged according to the Åland regional government’s own pension regulation. The Finance Department of the regional government of Åland implement these pensions.

Finnish Centre for Pensions – Central body of and expert on statutory earnings-related pensions