Managing Director’s review
Strong performance in exceptional circumstances
The impact of the coronavirus pandemic was reflected in various ways in the Employment Fund’s operations in the first half of the year. We switched to working almost entirely remotely as soon as the government of Finland declared a state of emergency. Right at the beginning of the coronavirus outbreak, we realised that the significant increase in unemployment allowance contributions, particularly due to temporary lay-offs, called
for exceptional measures to ensure our liquidity and the financing of unemployment daily allowances for unemployment funds.
At the end of March, the Board of the Employment Fund called on the Finnish Government to secure the financing of unemployment insurance. The liquidity of the Employment Fund was ensured by various measures. The Employment Fund agreed on a state-backed standby credit facility with several banks. The government undertook to finance the portion of earnings-related unemployment allowance in a layoff period that corresponded to basic unemployment allowance from April until the end of 2020. In June, we secured our liquidity by issuing two bonds for a total of 1.2 billion euros.
The effects of the coronavirus pandemic were also reflected in increased contacts from applicants for adult education allowances as educational institutions cancelled or reorganised their activities. Despite the exceptional circumstances, the services of the Employment Fund have worked well for our clients.
Legislative changes and projects that shaped our daily life
At the beginning of the year, the Employment Fund started using the Incomes Register for processing adult education allowances. The necessary income information of the applicant can now be obtained directly from the Incomes Register.
The Finnish Parliament approved the reform of the adult education allowance scheme in the spring, and the Fund has been preparing itself for the entry into force of the reform in early August. The aim of the reform is to facilitate the combining of study and work and, at the same time, to extend the adult education allowance to new groups in the labour market.
We have also been able to take the projects in our action plan forward reasonably well, despite the coronavirus crisis. Our calendar has been filled with the development of our digital work environment and information management, the renewal of our basic IT services and the strengthening of our information security, the operationalisation of our communication strategy, and the development of our customer strategy. In addition, we have enhanced the monitoring of the national economy and the labour market.
Despite the coronavirus pandemic, unemployment insurance contributions were paid as usual from the first quarter of the year. In May, the Board of the Employment Fund submitted a proposal to the government to waive the prepayment model for unemployment insurance contributions, as the use of the prepayment model has remained very low.
Economic and employment developments are difficult to predict
The economic and employment outlook for next year is very uncertain. In August, the Employment Fund is preparing to make a proposal on the level of unemployment insurance contributions in 2021. According to an estimate released in May, there is a need for an increase in payments for next year. The Employment Fund continuously and actively monitors the development of its operating environment. The Fund’s liquidity and operational capacity have remained stable even during the coronavirus crisis.