1. Healthcare

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To whom it may concern
With over 40 years’ experience in pension insurance, we want to make things easy
and convenient for you. We are the biggest provider of statutory earnings-related
pension insurance TyEL in Finland. We provide reliable and efficient service. As our
customer, you will benefit from our client bonus system which has been proven to
be most generous.
This brochure contains information of the statutory insurance policies, contributions
and benefits which are applicable to all employers who have employees with a local
contract (special rules apply to posted workers). According to Finnish Law the
employer is obliged to insure all employees working in Finland. Finnish Social
Security might also be applicable to internationally mobile employees who are
subject to Finnish Social Security either by a bilateral Social Security Agreement,
EU Regulation or based on Finnish national legislation.
Statutory insurance policies in Finland
According to Finnish law, an employer is obligated to provide statutory Social
Security coverage for its employees in Finland. The statutory social security consists
of:
- National Pension
- National Health/Social Security Insurance
- Earnings-related pension insurance TyEL
- Workers' compensation insurance/Accident at work
- Unemployment insurance
- Group life assurance for employees
When and how to take out the statutory insurance policies
Since the responsibility to provide statutory insurances lies on employer, the
contributions shall be paid by the employer and the employee's share is deducted
when paying the salary. Arrangements where the employee would receive a lump
sum from the employer and take care of the employer's responsibilities are strongly
discouraged.
Note for employers in an EU/EEC member state:
You can authorize an employee to sign the statutory earnings-related pension
insurance and workers' compensation insurance for you. Please refer to this link
for a model form.
TyEL pension insurance: Insurance policy shall be taken within one month after
the first salary payment.
Accident at work: The insurance must be valid on the onset day of first
employment.
Unemployment insurance: For prescription of provisional payments, please
contact the Unemployment Insurance Fund (TVR).
Social Security Insurance: The contribution is due the 12th day of the month that
follows the salary payment month. (If a company is taxed in Finland, the National
Pension contribution is paid together with the company taxes.)
Varma Mutual Pension Insurance Company
P.O. Box 1, FIN-00098 VARMA, FINLAND
Visiting address and domicile
Salmisaarenranta 11, Helsinki
Telephone
Fax
+358 10 244 0
+358 10 244 4752
Business ID 0533297-9
www.varma.fi
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To take out statutory earnings-related pension insurance TyEL, please fill in, print
out and send the signed application form as well as employee information to Varma.
TyEL policy can also be arranged by contacting our co-operating partner If plc
(website in Finnish), which provides worker's compensation insurance as well as
group life assurance.
Unemployment insurance policy shall be signed by contacting TVR.
In regard to the Social Security Insurance contribution, please file the periodic tax
return.
Contributions 2015
The contributions are annually determined by the Ministry of Social Affairs and
Health. The contributions are fixed for small scale employers with payroll less than
MEUR 1.9. The employer shall withhold the employee's share of the contribution
(TyEL and unemployment) from the insured person’s gross salary.
Main rule is that the Pensionable Salary is, with few exceptions, same as the
taxable salary. Employer pays the gross contribution to the respective policy
provider.
Employer
TyEL pension insurance
Accident at work insurance average
Unemployment insurance
Group Life Assurance
19.00% / 17.50%*
1.00% (varies btw 0.10%-7.00%)
0.80%
0.07%
Employee (withhold from salary)
TyEL pension insurance
Unemployment insurance
5.70% / 7.20%*
0.65%
Total cost for the employer is 21.52%** + SOTU-maksu (see below) 2.08% =
23.60% and for the employee 6.35% / 7,85%* (tax-deductible in private taxation)
* for those of age 53 and older; additional contribution lowers employer’s contribution
** 20.02%, if employee of age 53 and older
Both domestic and foreign employers are obliged to pay the Social Security
Contribution ("SOTU-maksu") to the State. The total contribution is 2.08 % of salary.
Further information is available from the tax authorities.
Taking care of insurance policies
TyEL policy holders can choose between two reporting methods - annual notification
or monthly notification.
• If you choose annual notification you will pay provisional contributions
according to your choice 1-12 times a year based on estimated payroll and
declare once a year, in January, the actually paid salaries from the last
calendar year.
• Monthly notification method means that you will have to report the paid
salaries once a month (by the 20th of the month following salary payment).
Monthly notification requires a password to our in-logged service which is
available either in Finnish or in Swedish.
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Workers' compensation and Unemployment insurance contributions are based on
estimated payroll. Once a year in January you will have to return a declaration of
paid salaries in the previous calendar year for the final calculation.
Benefits
1 National Pension - National Health/Social Security Insurance
The National Pension and Health Insurance are administered by the Social
Insurance Institution (Kela) and its local offices.
The Health Insurance covers sickness allowance, rehabilitation, reimbursement of
medicine costs, subsidised hospital fees and handicap benefits. Other Social
security covers family benefits, housing allowance etc.
National Pension provides a means tested flat rate pension for persons without
earnings-related pension or with a very low earnings-related pension. Full national
pension requires 40 years of residency between the ages of 16 and 65 years. More
information on www.kela.fi
2 Earnings-related pension, TyEL
The TyEL Scheme is administered by authorised private pension insurance
companies. The Finnish Centre for Pensions (ETK) governs the register of
employment and vested pension rights under the private sector pension schemes.
The TyEL contributions are affected by the technical rate of interest as well as client
bonus. Technical rate of interest is determined by the Ministry of Social Affairs and
Health. If the annual contributions are paid before July 1st the interest is calculated
in the employer's favour.
We at Varma have provided our clients highest bonuses over the last 5 years by
being an efficient pension provider and by getting a high rate of return to funds and
investments.
2.1 Benefits
-
Old-age pension flexibly from the age of 63 to 68 years
Part time pension from the age of 61 years
Vocational rehabilitation
Disability pension
Survivor’s pension
The pension right is fully vested immediately after the start of employment. There
are no salary ceilings either for the contributions or benefits.
You will find more information about the pension benefits on our website
www.varma.fi
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3 Workers' Compensation Insurance
The workers' compensation insurance is administered by separate private non-life
insurance companies, such as If P&C Insurance Company Ltd.
If a person has been injured at work (even on the way to/from work or on a business
trip) or acquires a work related illness, he/she is covered by workers' compensation
insurance.
The insurance covers the following benefits:
Full reimbursement of necessary hospital care, medicine, travel expenses and
medical equipment
Sickness allowance (daily allowance equals to annual earnings/360)
Pension (85% of the salary in case of full disability up to 65 years of age.
Thereafter the compensation rate is 70%)
Handicap indemnity
Survivor’s pension to spouse or common law spouse if common children and
children up to the age of 21 years
Need supplement
Rehabilitation
Funeral grant
4 Unemployment insurance
Unemployment insurance covers basic unemployment benefit (flat rate). Entitlement
to earnings-related unemployment coverage requires a membership in an
unemployment fund or alternatively with a trade union.
5 Group life insurance
The group life insurance is based on Trade Union negotiations. The insurance
contribution decreases with increasing age. Contributions for the group life
insurance are charged together with the workers' compensation insurance. Please
read more on www.retro.fi
Good to know
A. Occupational Health Coverage
Under the Occupational Health Act, employers are required to arrange, at their own
expense, professional-level occupational health services for their employees in
order to prevent work-related health risks.
Employers can purchase occupational health services for their employees from a
municipal health centre or other organisation offering occupational health services,
such as a private medical centre. Employers can also operate an occupational
health unit by themselves or in cooperation with other employers.
B. Voluntary pension arrangements in Finland
Collective pension agreements are non-existent due to lack of earnings ceiling in the
statutory pension schemes. Usually only the management group and/or key persons
might have improved benefits.