Supervision of the Earnings-related Pension Scheme
The operations of the earnings-related pension scheme and related laws are supervised by the Ministry of Social Affairs and Health. The Financial Supervisory Authority supervises private sector earnings-related pension providers. The Ministry of Finance supervises Keva, the public sector pension provider, as well as the State Pension Fund. The Financial Supervisory Authority supervises the financial planning and asset transfers of Keva.
The supervision system for pension providers, as for other insurance activities, consists of the administration of the insurance provider, internal supervision systems and auditing, as well as external supervision.
The Finnish Centre for Pensions supervises that employers takes out pension insurance for their employees and that the self-employed insure themselves. The pension providers also supervise their own employer-customers.
Engaging in the insurance business is subject to license. The Council of State grants the license to authorised pension providers. Company pension funds and industry-wide pension funds must have rules that are confirmed by the Financial Supervisory Authority, but no actual license is required. Pension providers founded by law include Keva and the pension fund of the Central Church Fund, as well as the Farmers’ Social Insurance Institution and the Seafarer’s Pension Fund.
The Ministry of Education and Culture and the Church Council, subject to the general synod, are responsible for the supervision of the pension fund of the Evangelical-Lutheran Church.
Representatives elected by Parliament supervise the administration and operations of Kela.
- Ministry of Social Affairs and Health
- Financial Supervisory Agency
- Ministry of Finance
- Ministry of Education and Culture
- The Church Council
The Financial Supervisory Authority supervises authorised pension providers
Administratively, the supervision and inspection of the authorised pension providers is the responsibility of the Financial Supervisory Authority (FSA), which operates in connection with the Bank of Finland. FSA’s supervisory rights extend also to special pension providers, the Finnish Centre for Pensions and public-sector pension providers’ investment operations.
FSA monitors and inspects that the pension providers abide by the law and good insurance practices and use proper procedures in their operations. In particular, FSA supervises the development of pension providers’ economy and solidity. Furthermore, it confirms the rules of company pension funds and industry-wide pension funds. It also maintains a register of company and industry-wide pension funds and of insurance companies’ licenses.
When discovering an incorrect procedure, FSA may reprimand the pension provider, exhort it to correct the problem within a set time limit or prohibit it from continuing the incorrect procedure. To sanction the exhortation or prohibition, FSA may impose a conditional fine. The Council of State may finally restrict or revoke the pension provider’s license.
Each year, pension providers have to submit their financial statements to FSA, along with a report (compiled according to FSA’s instructions) of their operations and financial state, as well as other necessary information. FSA has the right to conduct inspections in the pension provider’s facilities and participate in meetings in which power of decision is exercised. However, it does not have the right to participate in the decision making.