Agreement reported on removing employers’ national pension contribution
Labour market organisations agree on welfare and unemployment issues
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Helsingin Sanomat has learned that Finnish labour union federations and employers linked with the Confederation of Finnish Industry (EK) and those in the public sector have reached agreement on major issues linked with the financing of social welfare and unemployment benefits.
Under the agreement, the national pension contribution will be lifted. Employers have complained that they have had to finance basic security on behalf of the state.
The employers’ national pension contribution has been 0.8 per cent of income for private employers, and 1.8 per cent for municipal employees. This comprises a transfer of nearly EUR 1 billion from private enterprises to the state.
The organisations agreed that the lifting of the national pension contribution would be linked with an increase in contributions to regular pension plans. The pension contribution is to be raised by 0.4 percentage points annually from 2011 to 2014 - a total of 1.6 per cent.
The costs of the increase will be shared by employers and employees.
The proposals follow the lines of a programme detailed by Minister of Finance Jyrki Katainen (Nat. Coalition Party) in Helsingin Sanomat in January. The measures are expected to have a stimulating effect on the economy.
Linking the lifting of employers’ national pension contributions with a long-term payment plan for the work pension system has been a goal for the labour union movement. Under the policy programme of the present government, the labour market organisations should agree on the matter.
The labour market organisations sent a powerful message to the SATA committee, which is renewing Finnish social welfare benefits.
The government will decide in the spring which of the proposals of the committee will be pushed forward as legislation.
The SATA committee’s proposal would have allowed cutting the duration of income-linked unemployment benefits in half. The labour market organisations agreed that the benefit would remain at 500 days.
Access to unemployment benefits is actually to be increased. Unemployed job seekers will be entitled to compensation if they have been employed for eight months during the 28 months preceding unemployment. At present, the requirement is for ten months of work.
The unions and EK also agreed that the basic unemployment benefits should not be increased without an increase in income-linked benefits as well. The aim is also to maintain the linkage between basic, and income-linked benefits.
The labour side agreed to employer demands for raising the minimum age for unemployment pension. EK and the SATA committee do not want those under the age of 60 to drop permanently out of work on the basis of unemployment.
The two sides also reached agreement on the system under which someone who has been unemployed would be entitled to subsidies for temporarily taking the job of someone who wants to take an extensive leave.
Under the agreement, the financing of the programme would remain unchanged. The state pays for about 45 percent of the costs, the employers contribute 38 percent, and the labour union organisations pay 17 per cent. EK has been critical of the system, but nevertheless agreed to it.
Helsingin Sanomat
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| 22.1.2009 - TODAY |
 Agreement reported on removing employers’ national pension contribution |
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