​Crisis measures to cut Finnish pensions contribution income by €1bn

first_imgThe organisation – which is the central body of Finland’s statutory earnings-related pension scheme – said the employer contribution reduction would be fi­nanced by the system’s economic and monetary union (EMU) buf­fer, whose purpose is to maintain employers’ social security contributions during the crisis.But Kian­der warned contribution income was also set to decrease significantly this year due to job losses, with the Finnish Centre for Pensions expecting to see around 300,000 employees laid off for different durations during the first half of this year.He also said the ear­nings-re­la­ted pen­sion sys­tem has been wea­ke­ned by falling share prices amid turbulent market conditions, which had con­si­de­rably re­duced pen­sion pro­vi­ders’ sol­vency buf­fers.Population projections resulting from the pandemic were likely to leave their mark on the pension system as well, he said.“The emergence of a pandemic and the increase in mortality are factors that may affect estimates of an increase in life expectancy. On the other hand, it is not impossible for the coronavirus crisis to have a positive effect on birth rates,’ he said.To read the digital edition of IPE’s latest magazine click here. Moves by the Finnish government to help businesses cope with the immediate economic fallout of the coronavirus outbreak will wipe out €1bn of contributions to occupational pension providers this year, and the sector faces other potential hits too, according to the Finnish Centre for Pensions.The government has temporarily lowered earnings-related pension contribution requirements from employers by around 2%, and allowed businesses unable to operate during the crisis to postpone contributions completely for up to three months – a measure agreed with la­bour-mar­ket organisations, it said.Jaak­ko Kian­der, director of the Finnish Centre for Pensions in charge of research, statistics and planning, wrote in an analysis article: “The measures which have been decided upon will reduce the premium income of pension institutions by about €1bn for the current year.”This loss would be made up for by rai­sing emplo­yer cont­ri­bu­tions in 2022–2025, he said, in a new publication from the centre.last_img

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