Background information

In accordance with Employees' Pensions Act (Työtekijän eläkelaki) (395/2006), both employer and employee contribute to employees' pension. The basic percentage of employers contribution in 2020 is 25.3% of employees salary. Company size and other factors may however increase or decrease this percentage. In order to ease the pressure the outbreak of COVID-19 puts on employers and financial stability, amendment to the Employees Pensions Act and other relevant acts that temporarily decrease the employers contribution by 2.6%, have been passed.

Content of measure

This measure applies to all private sector employers.

The Government estimates that temporary deductions to employers' pension contribution will amount to €1.05 billion.

In order to cover for deductions made in 2020 and increase the buffer of the work pension system that is used for financing these temporary deductions, employers' pension contribution will be increased by 0.4 between 2022 and 2025. The monetary support provided with the help of this measure is thus temporary.

There is no estimate regarding how much this temporary deduction will affect the contribution of an individual employer to its employees pensions.

Employees' contribution to pension will not be affected by this measure.

Use of measure

No information up to this date.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Social partners jointly	Other

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Agreed (outcome) incl. social partner initiative	Agreed (outcome) incl. social partner initiative
Form	Any other form of consultation, institutionalised (as stable working groups or committees) or informal	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Peak or cross-sectoral level

Involvement

All peak-level social partners (Confederation of Finnish Industries, the Confederation of Unions for Professional and Managerial Staff in Finland, the Central Organisation of Finnish Trade Unions and the Finnish Confederation of Professionals STTK) were involved in designing this measure.

Views and reactions

In March 2020, the Finnish peak-level social partners jointly proposed a set of actions for the Finnish Government. These proposed measures seek to amend labour law and facilitate adaptation of businesses to the new circumstances. They were proposed as a package of measures that includes both measures that support adaptation of businesses to the new market situation and measures that improve the situation of employees who have been dismissed or temporarily laid off.

Temporary deductions to employers' pension contribution were part of the set of measures proposed by the social partners.

Sources

• 20 March 2020: Social partners’ proposals to help businesses in the corona crisis (akava.fi)
• 02 April 2020: Hallituksen esitys eduskunnalle laiksi työntekijän eläkelain mukaisen vakuutusmaksun tilapäisestä alentamisesta vuonna 2020 (www.finlex.fi)
• 07 April 2020: Työnantajan työeläkemaksuja alennetaan väliaikaisesti koronaepidemian aiheuttaman vaikean taloustilanteen vuoksi (stm.fi)