Actuarial principles and insurance terms and conditions

The actuarial principles define, among other things, how the earnings-related pension providers are to calculate

  • the insurance contributions,
  • the technical provision,
  • the pension liability, and
  • the common interest rate, that is, the return requirement.

Earnings-related pension insurance companies, industry-wide and company pension funds, as well as specialised pension providers have their own actuarial principles.

The insurance terms and conditions are applied to the insurance contract signed by the employer and the earnings-related pension insurance company. The insurance terms and conditions include details on

  • how to define the persons covered by the insurance,
  • the validity period and the termination of the insurance,
  • the payment of insurance contributions to the insurer, and
  • the consequences in case payments are neglected.

The insurance terms and conditions also regulate the premium lending.

Preparing the actuarial principles and the insurance terms and conditions

The actuarial principles of the earnings-related pension insurance companies are prepared by representatives from the earnings-related pension insurance companies, the Finnish Centre for Pensions and the Ministry of Social Affairs and Health.

The actuarial principles of the industry-wide and company pension funds are prepared by the industry-wide and company pension fund working group. The group is chaired by a representative from the Ministry of Social Affairs and Health, and its members are actuaries from the Finnish Centre for Pensions and the service offices of the pension providers.

The principles for calculating the insurance contributions and technical provisions are drawn up safeguarding the interests of the insured. In other words, the pension company’s ability to handle its future pension payments (principle of solidity) must be secured. When drawing up other principles, attention is paid to achieving reasonable principles (principle of moderation).

When preparing the insurance terms and conditions and the actuarial principles, the pension providers have to cooperate. The principles may not differ from one pension provider to another, as that would hamper the handling of common matters under the earnings-related pension acts.

Confirming actuarial principles and insurance terms and conditions

The Ministry of Social Affairs and Health confirms the private-sector pension insurance terms and conditions and actuarial principles (including those of the Farmer’s Social Insurance Institution).

The contribution principles of state pensions are confirmed by a Council of State decree. The Ministry of Finance confirms the administrative expenses relating to the pension contribution. Keva’s Board of Directors issues the contribution principles for the pensions of Keva’s member corporations.