Comparison of Contribution Level
Comparisons of pension contributions and expenditure usually include only statutory pensions although, in most European countries, supplementary pensions agreed on the labour markets form a considerable part of the overall pension provision. A comparison that covers only statutory pensions is problematic in particular from Finland’s point of view. Supplementary pension schemes are rare in Finland and, as the accrual of statutory earnings-related pension of wage earners is in no way limited by earnings- or pension ceilings, nearly all paid pension contributions are statutory. A more realistic and, from the point of view of the Finnish scheme, a more comparable view of the total contribution burden in different countries is achieved by reviewing the combined contribution levels of both statutory and supplementary pensions agreed on the labour markets.
The Finnish Centre for Pensions’ comparison of contribution levels offers a view of the overall pension contribution burden in different countries, taking into account not only statutory pension contributions but also contributions for supplementary pension provision and the State’s share of the financing. The comparison shows that excluding supplementary pensions from the study results in a lacking view of the overall pension contribution burden in different countries. From the point of view of the comparison, the central result is that the countries’ contribution levels are becoming more uniform when the comparison includes not only statutory contributions but the overall contribution burden of the pension schemes.