Managing Director's review
A busy first half of the year for the Employment Fund
On 1 January 2019, the Unemployment Insurance Fund and the Education Fund were merged to form the Employment Fund. The new Fund was tasked with handling the statutory duties of both of the previous funds: collecting unemployment insurance contributions, financing earnings-related unemployment security, and granting and paying adult education allowances.
The merger was executed as planned. A lot of work has been done to ramp up the new Fund. In the first half of the year, this has included building a new organisation for the Fund and taking measures to implement the Employment Fund’s strategy.
Since the beginning of 2019, the Employment Fund has made use of data from the Incomes Register when it levies and collects unemployment insurance contributions. The transition to the Incomes Register was successful. Preparations are now being made for the introduction of the Incomes Register for adult education allowances. The Fund is also involved in preparing the adult education allowance reform, which will take effect in 2020.
Slowdown in economic growth may be reflected in employment trends
Finland’s economic growth has slowed since the start of 2019. At the same time, the outlook for the future has become less certain and more difficult to forecast. Despite the deteriorating economic climate, employment has increased, and unemployment continued to decline throughout the first half of the year. However, the slowdown in economic growth may be reflected in employment trends later on this year or next year.
In May, the Employment Fund estimated that the unemployment insurance contributions for 2020 could remain as before or be reduced by up to 0.6 percentage points. At the end of August, the Employment Fund will make a proposal to the Ministry of Social Affairs and Health for the unemployment insurance contributions for next year.
The labour market organisations made a submission to the Ministry of Social Affairs and Health in June proposing that the maximum amount of the business cycle buffer be set at six per cent of the expenses incurred by the Fund as a result of the unemployment rate – amounting to approximately EUR 1.75 billion – as of the beginning of 2020.
Download our half-year report 2019
Half-year 2019 highlights
Business cycle buffers provide financial stability
The Employment Fund’s business cycle buffer helps us to balance the financing of unemployment benefits and other benefits. The buffer also shields both employers and employees from sudden fluctuations in unemployment insurance contributions.
Social partners drafted a proposal to set a ceiling for the Employment Fund’s business cycle buffer in the spirit of the national Competitiveness Pact in the spring. The proposal calls for capping the buffer at an amount equal to the cost of a 6% unemployment rate as of the beginning of next year. In practice, this would allow us to build a buffer worth approximately EUR 1,750 million.
The Employment Fund already has 20 years of experience in managing the buffer, and history has taught us that the buffer is truly needed. Read more
Incomes Register brings big changes for many
The introduction of the Incomes Register was a major shock to the system for many employers and accounting firms as well as for the operators who use the information. Most customers adopted the Incomes Register without a hitch, but there is still a lot to do in terms of, for example, training and the technical design of the system.
The deployment of the Incomes Register has created a new partnership network among the authorities that use the data, which is working hard to iron out the kinks.
The Employment Fund is also actively involved in the effort. The payroll information held in the Incomes Register will be used to grant adult education allowances for the first time in 2020. Read more
Moving forward – together
The Employment Fund was created when the former Education Fund and Unemployment Insurance Fund merged at the beginning of 2019. However, the preparations for the merger began much earlier with the formulation of the Fund’s new values, vision, mission and strategy.
Restructuring requires boldness to step outside of our comfort zone, explore a new direction and take leaps that are long enough to leave old habits behind. Our current priorities are training our experts and honing our culture.
We are only at the beginning of our journey, but we are moving forward – together. The know-how and expertise that we share and the companionship that we have in each other are what will keep us going. Read more
January—June 2019 in figures
Paid adult education benefits
Contributions to Kela
for persons who are not members of Employment Funds
Contributions to Employment Funds
the pension cover of
Mission, vision, values and strategy
Providing security for changes in working life
Superior executor of social security
Our customers come first
We are a united team
A pioneer in customer-oriented development of efficiency and
effectiveness of services and operations
Creating added value through information and anticipatory measures
An active and respected actor in the fund’s network
Personnel well-being and an attractive employer
Steady development of unemployment insurance contributions