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Construction firms typical customers of our supervisory department

Shortages in earnings-related pension insurance exist in all fields. Yet the construction field shows more insurance irregularities than other fields. This is evident from the customer classification made by the Grey Economy Information Unit of the Tax Administration.

The customer classification shows that a typical customer of the Supervisory Department of the Finnish Centre for Pensions is an established construction firm that has been in business for more than a decade and operates in the Uusimaa region. Of the employer groups caught through supervision, 23 per cent were construction firms.

Building contracts are often split into smaller entities that are carried out through a chain of subcontractors. The work force often comes from abroad. That explains the high risk of grey economy in the construction field.

It is noteworthy, however, that there are companies with irregularities in earnings-related pension insurance in all fields. In some cases, it is a question of unintentional mistakes while in others, it’s a question of grey economy and economic crime.

Problems pile up

Employers who have shortcomings in pension insurance matters very often also have tax debts. In 2018, around 41 per cent of the employers supervised by the Finnish Centre for Pensions had tax debts, compared to 32-55 per cent in 2016. Around 17% of the employers supervised by the Finnish Centre for Pensions were also undergoing debt recovery procedures.

The customer classification applies to employers who have shown irregularities in connection with the supervision of earnings-related pension insurance conducted by the Finnish Centre for Pensions. The Grey Economy Information Unit makes statistical customer classifications to support the planning and targeting of authority operations.