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Supervision of authorized pension providers

Authorized pension providers are responsible for implementing statutory earnings related pensions and their activities are grounded in legislation. For this reason, pension providers’ activities are also under supervision. The supervisory system consists of many parts, including internal control and auditing as well as public financial control and control carried out by ministries and other authorities.

Internal control

Pension providers’ internal control means procedures and activities intended to ensure that the goals and objectives set for the activities of authorized pension providers are met. In addition, internal control strives to achieve

  • economical and efficient use of resources;
  • adequate management of operational risks;
  • compliance with laws, regulations and guidelines;
  • compliance with the decisions, in-house plans, rules and procedures of governing bodies.

Internal control covers all the functions of authorized pension providers. It is an element of leadership, good governance and daily operations. Overall responsibility for internal control rests with the Board of Directors of the authorized pension provider.


The audit is a part of the supervisory system of authorized pension providers in the same way as in other companies. The assessment performed by the auditors is a key tool in ensuring the accuracy and transparency of financial reporting. The audit ensures that the financial statements and the report on operations provide accurate, sufficient and consistent information.

Public financial supervision

The Financial Supervisory Authority (FIN-FSA) — operating in conjunction with the Bank of Finland — is mainly responsible for the public financial supervision of pension providers. Supervision by FIN-FSA encompasses

  • supervision of the finances, governance and procedures of earnings-related pension providers in the private sector, i.e. pension insurance companies, industry-wide pension funds, company pension funds, as well as the Seafarers’ Pension Fund and the Farmers’ Social Insurance Institution;
  • supervision of the investments made by the public-sector pension provider Keva and the public-sector pension funds State Pension Fund and the Church Pension Fund.

FIN-FSA monitors the legality, not the appropriateness, of the pension providers’ activities.

The Financial Supervisory Authority is responsible for ensuring that

  • the bodies under supervision operate in a stable manner;
  • the interests of the insured are safeguarded; and
  • the general confidence in the system is maintained.

First and foremost, FIN-FSA monitors the solvency and financial circumstances of pension providers in the public sector. In addition, FIN-FSA monitors the competitive conditions of pension insurance companies, investigates restrictions on competition and the associated benefits for insured persons.

Earnings-related pension providers are required to present FIN-FSA with their annual financial statements, a report on their operations in keeping with FIN-FSA’s regulations and any other information that may be needed. FIN-FSA also has the right to carry out inspections in pension providers’ premises and to participate in meetings where decisions are made. However, FIN-FSA is not entitled to participate in the actual decision-making.

In addition to its supervisory role, FIN-FSA participates in the preparation and implementation of regulations for authorized pension providers, issues orders and guidelines for earnings-related pension insurance, and ratifies the rules of company pension funds and industry-wide pension funds.

Ministries and other authorities

Among the ministries, the Ministry of Social Affairs and Health and the Ministry of Finance participate in the supervision of authorized pension providers.

The Ministry of Social Affairs and Health is responsible for preparing legislation in the earnings-related pension sector. The Ministry also confirms the actuarial principles for pension contributions in the private sector. Moreover, the Ministry presents the licences of pension insurance companies, their extensions and revocations to the Government, which confirms the licences.

The Ministry responsible for municipal affairs, i.e. the Ministry of Finance, is accountable for the general supervision of Keva’s activities. FIN-FSA is liable for supervising Keva’s financial planning and investments, and reports to the Ministry of Finance on its supervision. As concerns the implementation of the State’s pension provision, Keva is supervised by the National Audit Office of Finland.

The Pension Fund of the Evangelical Lutheran Church is supervised by the Church Council, which is subordinate to the Ministry of Education and Culture and the General Synod.
Another participant in regulatory supervision is the Finnish Competition and Consumer Authority, which supervises the application of the Competition Act. Since earnings-related pension providers compete for the business of employers and self-employed persons in the private sector, the Competition Act is also applied to their activities.

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