The Role of the Finnish Centre for Pensions in the Earnings-related Pension Scheme

The Finnish Centre for Pensions acts as the liaison body of the private-sector earnings-related pension scheme in an otherwise decentralised scheme. It aims at promoting the implementation and development of the pension scheme.

The Finnish Centre for Penisons does not insure employers or grant or pay pensions. Instead, it is responsible for tasks which it is useful to handle centrally. Such tasks include the following:

  • producing research, statistics and background information for the evaluation and development of the earnings-related pension provision and the monitoring of reforms
  • producing planning, training and communication services related to earnings-related pension matters, as well as providing support in the preparation of regulations
  • producing and managing services relating to the implementation of pension provision, e.g. data logistics, division of costs and actuarial services
  • producing legal, international, guidance and supervision services relating to earnings-related pension provision
  • acting as the liaison body in international earnings-related pension matters and as the agency transmitting pension applications of all Finnish residents applying for a pension from abroad.

The position and tasks of the Finnish Centre for Pensions are stipulated in the Act on the Finnish Centre for Pensions.

The customers of the services produced by the Finnish Centre for Pensions include the authorised pension providers, other handlers of social security and social insurance, the authorities, decision-makers, research and educational institutions, persons insured under the earnings-related pension acts, policyholders and the media.

Register data for pension provision

Almost all private-sector and public-sector pension providers maintain the pension accrual data in the common earnings and accrual register of the earnings-related pension scheme. Technically, the register is maintained on behalf of the authorised pension providers and the Finnish Centre for Pensions by Arek Oy, jointly owned by the aforementioned parties.

The register data of the pension scheme is used for the implementation of the pension provision as well as for research and statistics compiled on the basis of the register data.

Supervises pension insuring

One of the tasks of the Finnish Centre for Pensions is to supervise that employers take out pension insurance for their employees and that the self-employed insure themselves. If an employer or a self-employed person refuses to take out the insurance, the Finnish Centre for Pensions takes out the insurance with one of the authorised pension providers at the expense of the negligent employer or self-employed person.

Earnings-related pension guidance and division of costs

The Finnish Centre for Pensions issues application guidelines to the pension providers and makes decisions concerning the interpretation of the pension acts. The application guidelines provide interpretations and specify the principles laid down by law so that all the pension providers act in the same way when granting statutory pensions. The application guidelines are often prepared in cooperation with the pension providers and sometimes also with the labour market organisations.

One important responsibility of the Finnish Centre for Pensions is to divide the pension costs between the pension providers. This centralised clearing and division of costs makes possible the functioning of the decentralised scheme, in which the last provider grants and pays out the entire pension.