The Finnish earnings-related pensions are statutory social insurance governed by the EU Regulation on the coordination of social security systems. Statutory pensions are a strong element of national competence within the EU, and the purpose of the above Regulation is merely to coordinate the social security rights, such as pensions, of EU citizens moving between Member States. The practical issue is to enable people to move from one Member State to another in search of work without loss or overlapping of, for example, social security pensions.


It is important that the special features of the Finnish earnings-related pension system are duly taken into account when developing EU legislation. Statutory earnings-related pension insurance must be kept outside cross-border service provision. In Finland, earnings-related pension insurance can only be carried out by pension insurance companies registered in Finland. Likewise, the national regulation and supervision of pension providers’ solvency must be ensured.

The ageing of Europe’s population and the sustainability problems of public finances have made pension reforms a topical issue in the Member States. The properties of pension systems play an important role for public finances in all European countries. Following the economic crisis that began in 2008, the EU has introduced stricter economic coordination. Enhanced economic coordination also affects the pension policies of the Member States. Although the EU’s legislative competence does not directly encompass the arrangement of statutory social security pensions, the EU can use economic coordination to guide Member States to carry out pension reforms.

Economic coordination has become more binding in the 2010s. However, Member States often seek flexibility for it, and rules have also been interpreted in different ways. In recent years, social issues, such as questions pertaining to the adequacy of social security, have risen to the EU agenda for development. When the performance of Member States is assessed, we support the principle of placing the adequacy of pension benefits on a par with financial sustainability, as expressed in conjunction with the European Pillar of Social Rights.

If we ourselves keep our pension system in a good shape, it meets the EU’s requirements as well. The core value of the Finnish earnings-related pension scheme is associated with solidarity and wide-range sharing of risks, not only in financing but also between employees and employers and between different generations. Our earnings-related pension system has been built on the foundation of the Finnish labour markets and economy. It encourages labour mobility, because the pension follows the worker even when he or she changes jobs or goes abroad to work.

The pension system is maintained continuously, for instance by assessing and revising it. In this revision, it is important to invest in extending careers at the end, in the middle and at the start. A healthy ratio between retirement and the work history is important for the economy on the whole. With the pension reform, which entered into force in 2017, Finland has succeeded in ensuring the financial and social sustainability of the earnings-related pension system. In addition, the reform has a significant impact on reducing the sustainability gap in public finances. Even at the EU level, the reform can be seen as a model example of adapting to the trend of longer life expectancy.

We believe that Finland should ensure the national independence of decision-making concerning our statutory earnings-related pension system in relation both to economic coordination and to the future development of the entire Economic and Monetary Union. The development of the Economic and Monetary Union EMU is one of the EU’s most important missions, which may also have an impact on the Finnish earnings-related pension system through the financial markets, the fiscal union and the integration of decision-making.