|
Finland National Pension Plan
Finland's first national old-age pension plan dates
from
1937, but it was so poorly funded that a new National
Pensions
Act was put into effect in 1957. In the late 1980s, this
law,
somewhat reformed, was still the basis of Finland's
National
Pension Plan, which was open to all residents over the age
of
sixteen, even to those who had never paid into it. Even
those
foreigners not from the Nordic countries were entitled to
this
pension if they had resided in Finland for at least five
years.
Those who left for residence in a country outside Nordic
Europe,
even those who were Finnish citizens, could receive the
pension
for only one year. The flat-rate national pension could be
paid
as an old-age pension, once a person reached the age of
sixtyfive ; as an invalidity pension (either full or partial) to
those
between the ages of sixteen and sixty-four who were no
longer
able to work; or, in some cases, to the long-term
unemployed who
were in their late fifties or early sixties. In addition
to these
classes of beneficiaries, survivors of those eligible for
national pensions who were not themselves eligible for the
pensions could receive pensions under the terms of the
Survivor's
Pension Plan. Also tied to the National Pension Plan were
payments for handicapped children living at home and for
some
combat veterans of World War II.
Payments of the national pension were uniform for
everyone;
in the mid-1980s, they amounted to Fmk334 (for value of
the
Finnish mark--see Glossary)
a month. To this amount were added
the assistance payment, which varied according to a
pensioner's
marital status, the cost of living in his or her locality,
and
other pensions that he or she received. Other
supplementary
payments could be made for dependent children, for degree
of
disability, and for housing costs, as well as for veterans
of the
Civil War and of World War II. In the mid-1980s, the
supplemental
payment to a single pensioner could range from Fmk1,362 to
Fmk1,436 a month. The supplement for each child amounted
to
Fmk181, and housing supplements varied according to
housing costs
but could amount to as much as approximately Fmk1,000.
Helplessness supplements could be worth up to about
Fmk400,
depending on the age and the physical state of the
pensioner.
National pensions were indexed, and they increased in
value each
year. Since reforms of the early 1980s, national pensions
were
not taxable if they were the sole source of income.
Pensions were
no longer affected by a spouse's earnings or pension
income, and
the national pension could only be reduced by income from
other
pensions. The National Pension Plan was funded by the
beneficiary's own contributions, about 2 percent of his or
her
locally taxable income, and by employer contributions of 4
to 5
percent of the insured person's wages.
Data as of December 1988
|
