Parties to the Pension Scheme
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 public-sector pension providers. Together with the Finnish Centre for Pensions, the authorised pension providers participate in the preparation of instructions and legislation.
The authorised pension providers are responsible for awarding and paying out earnings-related pensions. They also advice the insured in pension matters. Employers and the self-employed account for their earnings-related pension contributions to the authorised pension providers.
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 office of the Social Insurance Institution or the Finnish Centre for Pensions.
According to the so-called principle of the last institution, the earnings-related pension of employees and self-employed persons is awarded and paid by the pension provider where the person’s last employment contract or self-employment was insured.
The authorised pension provider which insured the insured person’s last employment calculates the total amount of the pension accrued from different employments, handles the payment of the pension to the pension recipient and levies the other pension providers’ shares of the pension through the cost clearing handled by the Finnish Centre for Pensions.
Private-sector pension provision handled by several authorised pension providers
In Finland, the authorised pension providers, special pension providers, company pension funds and industry-wide pension funds are responsible for the implementation of the private-sector statutory earnings-related pension provision (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 pension provision in their own fields. The operations of these institutions are based on separate statutes: the Farmers’ Pensions Act and the Seafarer’s Pensions Act.
The implementation of public-sector earnings-related pensions mainly handled by Keva
The pension provision of public-sector employees is regulated in the Local Government Pensions Act and the State Employees’ Pensions Act. The employees of the Social Insurance Institution, the Evangelical-Lutheran Church, the Orthodox Church, the Bank of Finland and the regional government of Åland have their own pension regulations.
The implementation of the earnings-related pension provision for public-sector employees is handled mainly by Keva. As for municipal employees, Keva handles both the implementation and the funding of their earnings-related pension provision.
Keva also handles the implementation of pension provision for employees of the State. Until 2013, the State Treasury will continue to register employment relationships, collect and pay pension contributions to the State Pension Fund, handle the actuarial tasks relating to pension funding, and handle statistics as well as benefits corresponding to group life insurance. The transfer of these functions to Keva is being prepared.
The Central Church Fund is liable for the pension provision of the employees of the Evangelical-Lutheran Church, but the implementation of pension activities is handled by Keva. The Finance Department of the Central Church Fund will continue to handle issues relating to pension financing.
Depending on their position and the date on which their employment has 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 implementation of the pension provision is handled by an earnings-related pension provider, Keva or the Central Church Fund of the Orthodox Church.
The implementation of the pension issues regarding the employees of the Social Insurance Institution is managed by Keva as of the beginning of 2012.
The pension provision of the employees of the regional government of Åland has been arranged according to its own pension regulation. The Finance Department of the regional government of Åland handles its implementation.
The pension issues of the employees of the Bank of Finland are handled by Innova Personnel Fund and Pension Services Ltd.
The national pension scheme is managed by the Social Insurance Institution
The national pension scheme is administered by the Social Insurance Institution. In addition to the national pension, the Social Insurance Institution handles also other social security. National pensions are financed by public funds.