The Finnish earnings-related pension system has a decentralized administration. This means that there are many earnings-related pension providers of different types and numbers.

In private sectors, earnings-related pensions are provided by pension insurance companies, company pension funds and industry-wide pension funds, which are governed by private law. The employer decides which pension provider is given the task of arranging the employees’ pension provision.

Seafarers and farmers have their own separate pension insurers. The pension provision of people working in the public sector, i.e. for the central and local governments and the church, has been arranged collectively through Keva.

Earnings-related pension insurers are responsible for managing the statutory earnings-related pension insurance included in social security.

This page describes the characteristic features of each pension insurer type. The governance of each pension insurer type is explained in greater detail on the page “Governance of earnings-related pension providers”.

Industry-wide pension funds

An industry-wide pension fund is responsible for the pension provision of people working for one employer, a group of companies or for employers operating in the same sector. The fund may also manage the pension provision of entrepreneurs. Industry-wide pension funds may not engage in any other insurance business.

The establishment of an industry-wide pension fund does not require a proper permit from the authorities. However, approval for the by-laws of the fund, and for any amendments to the by-laws, is sought from the Financial Supervisory Authority, and the fund must be reported for registration in the insurance fund register within the prescribed time. As a condition for approving the by-laws and their amendments, the Financial Supervisory Authority may require that the pension fund acquires a sufficient guarantee capital or initial assets.

There are five industry-wide pension funds that manage statutory earnings-related pension provision.

Company pension funds

A company pension fund manages the pension provision of employees working for one or more employers or a group of companies. Apart from pension insurance, company pension funds may not engage in any other insurance business.

No authorization as such is needed for a company pension fund. However, approval by the Financial Supervisory Authority must be sought for the by-laws of a company pension fund and for any amendments to the by-laws. In addition, the fund must be reported for registration in the company pension fund register within the prescribed time.

There are 15 company pension funds that manage statutory earnings-related pension provision.

Pension insurance companies

Pension insurance companies manage pension provision for private-sector employees and self-employed persons. Pension insurance companies may not engage in any other insurance business.

Pension insurance companies must receive authorization from the Government for starting their operations. The Ministry of Social Affairs and Health must request an opinion from the Financial Supervisory Authority for an application concerning a new authorization or extension of an existing authorization. The authorization is valid in Finland.

In addition to the authorization, the establishment of a pension insurance company requires that the preconditions provided by law are met. A pension insurance company must have an initial capital of at least five million euros.

As to its legal form, a pension insurance company can be either a mutual insurance company or a limited liability company. A mutual insurance company is owned by the policyholders, i.e. the employers, and the insured. The holders of any guarantee shares may also be shareholders in a mutual insurance company. A pension insurance company organized as a limited liability company is owned by its shareholders.

As of the beginning of 2014, there are a total of six pension insurance companies. Four of them are mutual insurance companies and two are limited liability companies.

Keva

Keva manages pension provision for persons employed by municipalities, the State and the Evangelical Lutheran Church. In addition, Keva implements the employment-related pension schemes of the Social Insurance Institution’s personnel. However, Keva’s role varies when it comes to the funding of pensions.

In the case of municipal employees, Keva is responsible for both pension provision and its funding. Keva manages pension provision for the employees of its membership organizations. All Finnish cities, municipalities and joint municipal boards, as well as most municipal associations and limited liability companies, are members of Keva.

The pension services of individual State employees were transferred to Keva at the beginning of 2011. However, the State Pension Fund and the government are responsible for the funding of the State employees’ pensions.

The Church Pension Fund is responsible for pension provision for the employees of the Evangelical Lutheran Church of Finland, but Keva is responsible for the implementation of pensions.The Church Pension Fund is responsible for financing the pension provision and for investing pension assets.

Keva’s operations are based on the Public Sector Pensions Act and the Keva Act.

The Farmers’ Social Insurance Institution

The Farmers’ Social Insurance Institution (Mela) handles the statutory social insurance schemes for farmers, fishermen and reindeer breeders, as well as for recipients of grants and scholarships.

In addition to earnings-related pension provision, Mela implements:

  • the accident insurance system for agricultural entrepreneurs and grant/scholarship recipients;
  • the group life insurance system;
  • the sickness daily allowance system of Mela; and
  • the farmers’ early retirement aid system.

Mela also administers the holiday and stand-in scheme for agricultural entrepreneurs and fur farmers, and is responsible for providing advice and information about agricultural entrepreneurs’ occupational safety issues.

The Farmers’ Pensions Act contains provisions on Mela and its tasks.

The Seafarer’s Pension Fund

The Seafarer’s Pension Fund manages earnings-related pension provision for seafarers. In accordance with the Seafarers’ Pensions Act, the Seafarer’s Pension Fund is responsible for pension provision for seafarers working on board Finnish merchant vessels in international traffic and on ice breakers.

The operations and governance of the Seafarer’s Pension Fund are regulated by the Seafarers’ Pensions Act.

Other pension insurers

In addition to the above earnings-related pension insurers, the Government of Åland, the employees of the Finnish Orthodox Church and the personnel of the Bank of Finland have their own pension providers.

The Pensions Office in the Finance Department of the Government of Åland is mainly responsible for the earnings-related pensions of the personnel working for the Government of Åland.

The Central Fund of the Finnish Orthodox Church is responsible for the implementation of pension provision for the employees of the Orthodox Church

Innova Henkilöstörahasto- ja Eläkepalvelut Oy looks after the pension issues of the Bank of Finland personnel.