2020 in brief

Contributions and allowances

Unemployment insurance contributions were paid as usual despite the coronavirus pandemic

In 2020, the Employment Fund collected a total of 1,019 million euros of unemployment insurance contributions from employers and 1,073 million euros from employees. Unemployment insurance contributions were paid as usual despite the precarious economic and employment situation caused by the coronavirus pandemic. Unemployment insurance contributions were determined almost entirely on the basis of actualised pay information reported to the Incomes Register. At the end of 2020, a legislative amendment was adopted to waive the prepayment model for unemployment insurance contributions from the beginning of 2021.

As a result of the coronavirus pandemic, the number of unemployed jobseekers, especially laid-off workers, increased significantly from March 2020. The amount of unemployment insurance contributions was raised for 2021 to cover increased unemployment benefit costs.

Unemployment insurance contributions collected,
employers (EUR million)

This graph shows the unemployment insurance contributions collected from employers by the Employment Fund in the last five years (2016–2020). The amount collected from employers in contributions has decreased every year since 2016. In 2016, the Employment Fund collected a total of EUR 2,109 million in unemployment insurance contributions from employers. In 2017, a total of EUR 1,824 million was collected in contributions, in 2018, a total of EUR 1,508 million, in 2019 a total of EUR 1,278 million, and in 2020, a total of EUR 1,019 million.

Unemployment insurance contributions collected,
employees (EUR million)

This graph shows the unemployment insurance contributions collected from employees by the Employment Fund in the last five years (2016–2020). The contributions collected from employees rose every year from 2016 to 2018. In 2019, the amount of employee contributions decreased. In 2016, the Employment Fund collected a total of EUR 870 million in unemployment insurance contribution from employees, in 2017 it collected approximately EUR 1,242 million, in 2018 it collected approximately EUR 1,519 million, in 2019 it collected a total of EUR 1,379 million and in 2020 it collected a total of EUR 1,073 million.

The popularity of adult education benefits increased

Adult education benefits consist of adult education allowances and scholarships for qualified employees. In 2020, the number of recipients of adult education allowance increased significantly, and the number of scholarships awarded was also slightly higher than in the previous year. In 2020, a total of 186.9 million euros of adult education allowance was paid to 27,066 individuals. A total of 26,511 scholarships were awarded. Adult education allowances and scholarships totalled approximately 197 million euros, showing an increase of about 6 per cent compared to 2019.

The adult education allowance was reformed in August 2020. The aim of the reform was to facilitate the combining of study and work.

Number of beneficiaries, persons

This graph presents the number of beneficiaries on an annual basis for the period 2016–2020. The number of adult education allowance beneficiaries increased annually between 2016 and 2020. In 2016, the number of adult education allowance beneficiaries was 23,480. In 2017, the number of adult education allowance beneficiaries was 24,356. In 2018, the number of adult education allowance beneficiaries was 24,848. In 2019, the number of adult education allowance beneficiaries was 25,701. In 2020, the number of adult education allowance beneficiaries was 27,066. In 2020, approximately 22,393 individuals received the entrepreneurs’ adult education allowance or the adult education allowance based on the old legislation, and approximately 4,673 employees received an adult education allowance based on the new legislation.

Adult education allowances paid (EUR million)

This graph presents the amount of adult education allowances paid on an annual basis for the period 2016–2020. In 2016, EUR 189.2 million was paid in adult education allowances. In 2017, EUR 188.3 million was paid in adult education allowances. In 2018, EUR 173.5 million was paid in adult education allowances. In 2019, EUR 176.6 million was paid in adult education allowances. In 2020, a total of EUR 186.9 million was paid in adult education allowances.

Granted scholarships for qualified employees (pcs)

This graph presents granted scholarships for qualified employees paid on an annual basis in 2016–2020. The number of approvals for scholarship applications increased between 2016 and 2018. In 2019, the number of approvals decreased significantly. In 2020, the number of approvals increased slightly compared to 2019. In 2016, 24,277 applications were approved. In 2017, 24,588 applications were approved. In 2018, 30,274 applications were approved. In 2019, 26,187 applications were approved. In 2020, the number of approvals was 26,511.

Paid scholarships for qualified employees (EUR million)

This graph presents paid scholarships for qualified employees paid on an annual basis in 2016–2020. In 2016, a total of EUR 9.7 million was paid in scholarships. In 2017, a total of EUR 9.9 million was paid in scholarships. In 2018, EUR 12.2 million was paid in scholarships. In 2019, EUR 10.5 million was paid in scholarships. In 2020, a total of EUR 10.6 million was paid in vocational degree scholarships.

Financial figures

The net position of the business cycle buffer decreased

In accordance with Chapter 1, Section 3 of the Act on the Financing of Unemployment Benefits, in order to ensure liquidity and to balance out changes in unemployment insurance contributions due to foreseeable economic fluctuations in the national economy, the Employment Fund maintains a business cycle buffer.

The statutory maximum value of the business cycle buffer changed on 1 January 2020, and it now corresponds to the annual expenditure for an unemployment rate of six percentage points. At the end of 2020, the net position of the Employment Fund’s business cycle buffer stood at 1,045 million euros.

Development of the business cycle buffer (EUR million)

This graph presents the development of the net position of the Employment Fund’s business cycle buffer and the maximum and minimum amounts of the buffer determined by the law over the last ten years (2011–2020). The net position of the business cycle buffer increased annually between 2011 and 2013. The net position of the business cycle buffer decreased significantly between 2014 and 2015. The net position of the business cycle buffer increased annually between 2016 and 2019. In 2020, the net position decreased. The maximum and minimum amounts of the business cycle buffer, which are determined by law, decreased between 2011 and 2012. The maximum and minimum amounts of the business cycle buffer, which are determined by law, increased annually between 2012 and 2020. In 2011, the net position of the business cycle buffer stood at EUR 293 million, while the maximum permitted amount determined by law was EUR 1,256 million and the minimum permitted amount was EUR -1,256 million. In 2020, the net position of the business cycle buffer stood at EUR 1,044 million, while the maximum permitted amount determined by law was EUR 2,079 million and the minimum permitted amount was EUR -2,079 million.

Key figures

EUR million	2016	2017	2018	2019	2020	Change (EUR million)	Change (%)
INCOME
Employer contribution income	2 043	1 769	1 458	1 238	993	-246	-19,8 %
Employee contribution income	870	1 243	1 519	1 379	1 073	-307	-22,2 %
Government contribution, funds	1 102	945	774	688	1 248	561	81,6 %
Liability component income	66	54	50	39	26	-13	-32,8 %
Net financial income	-4	-5	-7	8	-16	-25
TOTAL INCOME	4 077	4 006	3 794	3 353	3 324	-29	-0,9 %
EXPENSES
Unemployment funds	-1 581	-1 320	-1 068	-954	-1 372	419	43,9 %
Government contribution, funds	-1 102	-945	-774	-685	-1 245	560	81,7 %
Finnish Centre for Pensions	-846	-768	-620	-577	-870	293	50,8 %
Social Insurance Institution of Finland	-167	-208	-228	-206	-207	2	0,8 %
Adult education benefits	-116	-151	-187	-187	-197	10	5,5 %
Ministry of Economic Affairs and Employment	-23	-19	-20	-24	-25	1	5,6 %
State Pension Fund	-11	-13	-12	-8	-9	1	19,1 %
Insurance companies	-1	0	0	0	0	0
Administrative expenses	-12	-11	-13	-19	-21	2
TOTAL EXPENSES	-3 859	-3 435	-2 921	-2 659	-3 947	1 288	48,4 %
INCOME FOR THE PERIOD	220	572	872	694	-623
NET POSITION	-466	106	969	1 668	1 045

Investments

Responsible investment activities

The Employment Fund carries out investment activities to the extent necessary to manage the timing differences in the cash flows generated by its income and expenses, and for liquidity management purposes. We comply with the principles of responsible investing.

The value of investment and financial assets held by the Employment Fund amounted to EUR 1,831 million at the end of 2020 (EUR 1,020 million in 2019).

Icon: arrow in the middle of the dartboard

Investment spread (%)

This graph presents the distribution of the Employment Fund's investments across different asset classes. In 2020, most of the Fund’s assets were invested in money markets and bonds. At the end of the financial period 2020, EUR 1,127 million of the Fund’s assets were invested in money market instruments, EUR 682 million in bonds, EUR 0 million in equities and EUR 21 million in alternative investments.

Return on investments (%)

This graph presents the return on assets invested by the Employment Fund and the reference rate of return as a percentage over a period of five years, from 2016 to 2020. In 2016, the return on the Employment Fund’s investments was 0.3% and the reference rate of return was -0.1%. In 2017, the return on investments was 0.1% and the reference rate of return was -0.3%. In 2018, the return on investments was -0.1% and the reference rate of return was -0.6%. In 2019, the return on investments was 0.8% and the reference rate of return was 1.9%. In 2020, the return on investments was -0.7% and the reference rate of return was 0.1%.

Ensuring liquidity

The Employment Fund responded to the challenges posed by the coronavirus pandemic by securing its liquidity. The coronavirus pandemic changed the economic environment in Finland abruptly from March 2020, when the number of unemployed jobseekers began to increase rapidly.

The timeline provides an overview of the main changes in employment in Finland caused by last year’s coronavirus pandemic, as well as the Employment Fund’s measures to secure its liquidity.

Employment in Finland
in March 2020

Economic activity decreased as a result of the coronavirus pandemic. The number of unemployed jobseekers, especially laid-off workers, increased.

The government of Finland declared a state of emergency due to the coronavirus pandemic and enforced the Emergency Powers Act that imposes restrictions on business activities.

Employment Fund
in March 2020

The Employment Fund predicted a significant increase in unemployment benefit costs as a result of the coronavirus pandemic. The Fund started preparations to secure the financing of unemployment allowances.

The Employment Fund called on the government of Finland to secure the financing of unemployment allowances.

Employment in Finland
in April 2020

In April, the proportion of unemployed jobseekers of the total workforce increased to 16.5 per cent and was 7.7 percentage points higher than in the previous year.

Employment Fund
in April 2020

The Employment Fund agreed on a new revolving credit facility (RCF) worth EUR 800 million with five Nordic banks with a two-year maturity. The revolving credit facility is guaranteed by the Finnish state.

Employment in Finland
in June 2020

The number of coronavirus infections remained low during the summer, and the number of unemployed jobseekers slightly decreased compared to May. The state started funding the portion of earnings-related unemployment allowance in the lay-off period that corresponds to basic unemployment allowance until the end of 2020.

Employment Fund
in June 2020

The Employment Fund ensured its liquidity by issuing two bonds in the amount of EUR 1,200 million.

Employment in Finland
in August–September 2020

The number of coronavirus infections started to increase in the autumn, which dampened the economic prospects in many sectors. At the end of August, there were over 50,000 more laid-off workers than in the previous year.

Employment Fund
in August–September 2020

The budget of the Employment Fund 2021 was confirmed. The Fund proposed increases in unemployment insurance contributions for 2021 to cover unemployment expenses.

Standard & Poor’s affirmed AA+ credit rating on the Employment Fund with a stable outlook.

Sources: Ministry of Economic Affairs and Employment, Employment Fund