According to Heli Backman, who led the working group, there is no acute need for reform due to the current SOTE solution.
Municipal the reform work of the employment pension insurer Keva ended in a stalemate after more than two years of work.
According to a press release issued by the Prime Minister’s Office on Friday, the working group did not find a solution that would have been accepted by all those involved in the working group.
The reform attempt was based on the future prospects of Keva’s pension contributions. The number of payers of Keva’s pension contributions has decreased as municipal employees have been transferred to the private sector, for example from the social and health sectors, due to outsourcing. However, the number of people receiving an employment pension from the spring is not declining at the same rate.
There is a risk that Keva’s financial balance will be upset, as a large part of occupational pensions will be financed through annual premium income.
Currently, employer contributions in the municipal sector are about four percent higher than in the private sector.
Yet February 2019 reform seemed to be moving at a good pace.
The working group responsible for the preparation of the topic concluded its work at that time and proposed unanimously that Keva be divided in two in 2027. The change would have combined municipal and private sector pension schemes.
The intention was to set up a new employment pension insurance company under the legislation of the private employment pension scheme, whose customers could have been transferred to Municipal employees who were covered by the current Keva.
However, the additional benefits accrued over the years for those who worked on the municipal side would have remained with the public entity. This “public Spring” would not have taken on new insurers but would have continued to pay various additional benefits for as long as they still exist.
The same parties were represented in the working group at that time as in the working group that has now come to a standstill.
His work there was disagreement in the final working group, especially on the so-called neutralization fee. A payment of around € 15 billion would have offset the increase in costs for the private pension system brought about by the reform. Otherwise, current pension contributions should have been increased.
In practice, the additional costs are due to the fact that those working in the female-dominated municipal sector are longer than average, which means that they also have to pay a longer pension.
The level of the EUR 15 billion neutralization levy was agreed in the negotiations, but its timing and modalities were not agreed by the working group. Heli Backman agreed.
“There were disagreements between the parties that could not be resolved,” Backman, who works as the department head of the Department of Social Affairs and Health, tells HS.
The working group aimed at reforming Keva was led by Heli Backman, Head of Department at the Ministry of Social Affairs and Health.
According to Backman, the negotiations had to be stopped because the working group only had time until the end of this year to reach a conclusion.
“A solution to the neutralization method had been sought for a really long time, and there were several ways to do it. Now would have been the last moment to reach an agreement if we had wanted to stay on schedule. ”
Municipality- and the Welfare Area Employers (KT) pushed the responsibility for the failure of the negotiations to the account of the Confederation of Finnish Industries (EK).
“I would have liked EK to have a broader vision and commitment to common goals to improve the sustainability of the pension system,” commented KT’s CEO Markku Jalonen on Friday in its bulletin.
Represented EK in the negotiations Ilkka Oksala commented on this to HS, stating that EK had been seriously involved in the preparatory work from the outset.
“Based on the working group’s calculations and estimates, we came to the conclusion that it could not be convinced that the private pension system would not have become a municipal payer here,” Oksala justifies EK’s views.
According to him, EK was not convinced of the adequacy of the EUR 15 billion neutralization levy and, in particular, of its payment schedule.
“The payment schedule would have been designed to last for several parliamentary terms, and we considered that to be too great a risk. On this basis, we considered that the reform could not be taken forward. ”
RK’s Markku Jalonen (left) and EK’s Ilkka Oksala were divided on how the reform should have been implemented.
Oksala did not want to comment on whether EK is ready to continue working on the reform at a later stage. KT, on the other hand, hoped that the preparations would continue in the near future.
According to Backman, the working group is not promised a follow-up right away. Next, the government will assess whether there is a need to return to reform, and if so, on what timetable.
Originally plans to merge municipal and private sector pension schemes were Juha Sipilän Sote reform driven by the (central) government. In it, the model of freedom of choice would have led to an increase in the privatization of services and thus a reduction in the pension contributions received by Keva.
Sanna Marinin (sd) However, the SOTE proposal adopted by the government this summer does not put as much pressure on system reform as it lacks a corresponding model of freedom of choice.
“In the long run, one might think that at a new time, this may become relevant again. However, there is currently no immediate pressure and need for reform in sight, ”Backman notes, stressing that the funding of pension systems is currently stable.
“Rather, the aim was to strengthen future risk-bearing capacity. It is possible that we will return to this later. ”
In the working group In addition to EK and KT, the central trade union organization SAK, the Central Employees’ Association STTK and Akava were involved, as well as the Finnish Center for Pensions, the Finnish Employment Insurance Association, Keva, private sector employment pension companies and the Association of Finnish Municipalities as expert members.
According to the Ministry of Social Affairs and Health, no estimate of the working group’s costs was made, as it has been prepared as a job and in labor market organizations alongside one’s own work.
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source https://pledgetimes.com/occupational-pensions-the-working-group-spent-more-than-two-years-reforming-the-municipal-pension-monopoly-keva-and-did-not-reach-any-conclusion-in-its-work/
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