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Finland Employee Pension Plans
The Employees' Pensions Act was passed in 1961 to
supplement
the National Pension Plan which, while adequate for Finns
living
in the countryside--a majority of the population until the
1960s-
-did not provide enough benefits for city dwellers. During
the
next decade, other compulsory wage-related pension plans
were
enacted into law for temporary employees, for national and
local
government employees, for those working for a state
church, and
for the self-employed. At the end of the decade, a
supplementary
plan was created for farmers as well. Seamen had had an
incomebased plan since 1956, and, as of 1986, those active in
freelance professions such as acting and writing also obtained
coverage. These employment pension plans were completely
funded
by the employers, private or public, who paid
contributions,
equal on the average to about 10 percent of a worker's
earnings,
into funds managed by seven large insurance companies or
who set
up funds on their own. Self-employed persons had to choose
a
fund. The Central Pension Security Institute was
responsible for
keeping records about employment and benefits.
The normal age of pensionable retirement was
sixty-five, and
the pension paid was based on the average earnings one had
received in the last four years of work ending two years
before
retirement. One could receive up to 60 percent of
private-sector
earnings and up to 66 percent of public-sector earnings.
The
average wage-related pension in the mid-1980s was about
Fmk1,000
per month. Older employees, at work before these pension
plans
became effective, were guaranteed a minimum pension of at
least
29 percent if they retired before 1975, and 37 percent if
they
retired after this date. Like the national pension,
wage-related
pensions were indexed, and they increased each year. In
addition,
there were provisions relating to disability, early or
late
retirement, and survivors' benefits similar to those in
effect
for the National Pension Plan.
Data as of December 1988
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