New Director at the Finnish Centre for Pensions
KAROLIINA KIURU (LL.M), in charge of legal affairs, international pension matters, pension supervision and customer services as of August this year, believes in the power of cooperation. Her extensive legal expertise will strengthen the role of the Finnish Centre for Pensions as the producer of joint services in the field.
“We shouldn’t forget that the pension system secures a functional society and produces reliable services for the citizens”, Kiuru points out.
When society changes, pension legislation must also be reformed. “But it doesn’t happen on a whim. Entering the path of change, preparing and executing legal reforms takes several years.”
The main legislative reform in the 2020s will be the merger of the public and private pension system. “The merger will provide the earnings-related pension field with a wider financing base and better emergency planning.”
The merger is expected to be carried out by the year 2027. A draft of the bill could be ready in 2022.
As a result of the merger, the TyEL part of Keva will become a new earnings-related pension company. The public-sector part of Keva will continue to handle pensions of State, Church, Kela and Bank of Finland personnel.
As a rule, pension reforms involve changes in benefits. Not so in this case. “On a meta level, the merger of these two systems affects the financing of pensions. Hence, for the sector, this reform is huge”, Kiuru states.
Among her first tasks as a new director at the Finnish Centre for Pensions, Kiuru will participate in the developing of the organisation and its working culture. The company is moving to new multi-function locations in Kalasatama, Helsinki, at the turn of the year. “I like the idea that our new working environment will offer us the opportunity to cooperate with skilled experts in a relaxed and open environment,” Kiuru concludes.
in pension system
THE SELF-EMPLOYED PERSONS’ trust in the pension system is low. The system needs to be reformed.
Entrepreneur Mari Laaksonen (CleanMari) explains that many self-employed don’t necessarily understand that their pension insurance determines the level of their other social benefits, as well, such as the unemployment and the sickness allowance.
Laaksonen explains: “One concrete measure would be to raise the lower limit of the confirmed income of their statutory pension insurance.”
Labour market director Janne Makkula (Suomen Yrittäjät ry) calls for a reform of the pension system for the self-employed, with the main goal being to improve the self-employed persons’ trust in the pension system.
He argues that their insured income should be determined based on their monthly rather than their annual income from self-employment.
“That way, the self-employed could better compare their level of coverage to that of the wage earners.”
The Self-employed Persons' Pensions Act turns 50 this year and will be reformed.
EESSI to expand in October
THE ELECTRONIC EXCHANGE of social security information (EESSI) is rapidly expanding in EU countries. In Finland, information regarding workers’ compensation insurance has been exchanged via EESSI since December 2019. Since spring 2020, information concerning both unemployment benefits and Kela’s family benefits have been exchanged electronically.
As of September 2020, the exchange will include information on posted workers. As of October, the pension sector and recovery proceedings will join the electronic exchange system. In Finland, the Finnish Centre for Pensions handles the information exchange.
“From the customer’s point of view, we have taken a big step forward. Thanks to EESSI, handlers and customers are now receiving faster service,” says unit manager Noora Allenius (Finnish Centre for Pensions).
Already 6,000 European institutions exchange information via EESSI. Finland joined once an improved version was launched. As of this autumn, all EU Member States will use EESSI at least partly.
The great unknown
GENERATION Y sees questions relating to pensions as distant and bureaucratic. Tuija Siltamäki, chief editor of Ylioppilaslehti and host of new podcast on pensions (in Finnish) wants to blow off the dust from the pension debate.
Both the pension system and climate change are in crisis, but the latter is concrete while the former is elusive.
“We can see the effects of climate change with our own eyes. It’s much more difficult to concretely see that the pension system is heading for tough times,” Siltamäki points out.
According to Siltamäki, the young should get interested in pension issues, but unlike climate change, pensions don’t offer material for social media activism. “What’s the equivalent in pensions to recycling plastic? How can you get a sense of influencing and participating?”
Siltamäki concludes: It’s important that we know more about future problems and solutions. The solutions may not be pleasant, but hopefully they are intergenerationally fair.”