Sharing Economy and Insurance

New employment forms emerge as traditional working life changes. The line between actual employment and operating within a sharing economy is rapidly blurring as ‘light entrepreneurship’ (kevytyrittäjyys), operating mainly on digital platforms, gains ground.

The sharing economy means that goods and services are shared between service providers and service users. The sharing take place via digital platforms such as websites and applications. Well-known, globally operating platforms include, for example, Airbnb and Uber.

Most of the Finnish platforms are non-commercial and operate in social media. They offer goods and services on a private-to-private basis, although they are run professionally, much like businesses.

For many entrepreneurs who offer similar services, the platforms are seen as competition governed by different rules, explains development manager Markus Palomurto (Finnish Centre for Pensions). As the business grows and becomes more regular and more similar to ordinary entrepreneurship, those operating the platforms should take care of, for example, taxes and pension insurance. “As for statutory obligations, it makes no difference how the customers are contacted. What matters is the nature of the operations, the value of the work input and the duration of the operations,” Palomurto states.

According to the earnings-related pension acts, a person has to take out insurance under the Self-employed Persons’ Pensions Act when the annual value of their work input is over 7,800 euros and the operations continue for more than four months. “Operating over a platform does not eliminate the obligation to insure,” Palomurto points out.

www.jakamistalousinfo.fi offers information on the statutory obligations relating to sharing economy (soon also in English).

Online Pension Info

“What is my pension pot? Can I work while I’m retired?” These are among the many questions that people who approach their retirement age often ask as they plan for their future, particularly now that the partial-old age pension and a more flexible working life mean that there are more options.

Pension providers offer answers and help via their web services. Product manager Pauliina Hilkamo (Varma Mutual Pension Insurance Company) is approaching retirement herself and knows what she is talking about. She develops Varma’s web services to better meet the needs of the customers.

“People over 50 actively use our pension calculator to estimate what their pension pot will be when they retire,” Hilkamo states. Retiring from work means a big change in one's life. Pension providers help people see the whole picture. "That is why our websites provide a more holistic view of pensions. We don't focus only on euros," Hilkamo concludes.

Family leaves reduce pensions

Gender inequality in pensions is the result of many things. A forthcoming study by Kati Kuitto, Janne Salonen (Finnish Centre for Pensions) and Jan Helmsdag (University of Greifswald) of the labour market attachment of men and women born in Finland in 1980 shows that the early stages of working life are significant for men’s and women’s later employment and career development and for their pensions.

Although the wage gap between men and women is the main cause for gender inequality in pensions, breaks in working life due to unemployment and family leaves are of great significance. The study suggests that women, who tend to take much longer family leaves than men, are affected the most by the risks posed by breaks in early labour market attachment.

The notions that the home is the best place to take care of one’s young children and that mothers are better caretakers than fathers need to change.

Poorer ability to work

Disability pension retirees numbered 20,000 more in 2018 than in 2017. This unexpected increase can be explained in different ways, says senior researcher Mikko Laaksonen (Finnish Centre for Pensions).

The growing number of people suffering from mental disorders caused 47% of the increase in the number of new retirees on a disability pension. An ample one fifth (21%) was due to musculoskeletal diseases and 32% to other causes.

The improved economic outlook may also explain the unfavourable development. “When the economy is doing better, also people with poorer health are employed. In addition, when people are less afraid of losing their jobs, they are also less afraid of being ill,” Laaksonen explains.

Finally, the rising retirement age that followed the 2017 pension reform may also have contributed to the rising number of new retirees on a disability pension. To avoid having to work longer, the elderly are more interested in retiring on a disability pension.

Lena Koski
Lena Koski



Finnish Centre for Pensions

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