Finland
In Finland there are two pension systems: employment pension and national pension. The purpose of these is to guarantee pension security to residents in Finland against old age and incapacity for work, and also against the death of the family provider. Also, if an employee is not able to manage his or her work due to long-term illness etc., it is possible to take invalidity pension.
Employment or earnings-related pension is statutory and mandatory. It applies to all employees and self-employed persons. The size of the pension is affected by length of working career and earnings. Employment pensions are: old-age pension, invalidity pension, unemployment pension and survivors’ pension, plus early retirement pension and part-time pension. Employment pension payments are made by both the employer and the employee. A self-employed person will take out insurance on his or her own behalf.
Persons with no employment pension, or whose employment pension is small, receive minimum income in the form of the national pension. This pension accumulates on the basis of residence in Finland. Retirement pension, invalidity pension and unemployment pension are paid as national pension.
A person resident in Finland has the right to national pension if, on reaching 16 years of age, he or she has lived in Finland for at least three years. National pension may be granted to a citizen of a foreign country once he or she has resided in Finland for the last five years. The retirement age for national pension is 65, but it may be granted early to a person aged 60-64. The amount of national pension is determined on the basis of employment and civil service pensions and reimbursements equivalent to pensions.
Survivors’ pension may be paid to a widow(er) aged below 65 and living in Finland following the death of his or her spouse who also lived in Finland.
In addition to these pensions, pensions are paid on the basis of employment accident insurance and traffic insurance. It is possible to take out individual, voluntary retirement insurance policies in addition to statutory pensions.
The central body in the employment pension system is the Central Pension Security Institute; the highest authority in the field is the Ministry of Social Affairs and Health; and the players in the industry are supervised by the Insurance Supervisory Authority. Management of pensions in the private sector is delegated to private pension companies, pension trusts and pension funds.
