Employment pensions, disability pensions, and earnings-related unemployment benefits are based on wages earned while working. The social security and pension systems are largely funded by employers and employees themselves. Therefore, it is important that we are involved in decision-making concerning them.
Social Security Benefits Must Ensure Adequate Livelihood
Finland’s social security is largely built on statutory insurance. This refers to a social insurance system that provides protection against various social risks. Benefits based on social insurance include employment pension insurance, health insurance, accident and occupational disease insurance, unemployment security, and national and guarantee pensions. These benefits secure income during unemployment, illness, disability, childbirth, old age, and in the event of the death of a family provider.
Social insurance benefits are earnings-related and based on employment. They are mainly funded by insurance contributions collected from insured individuals and employers. The state finances part of the benefit costs through tax revenue. The social insurance system is complemented by various tax-funded benefits, such as housing allowance and social assistance, which serve as a last-resort safety net.
Ways to Develop the Social Security Benefit and Service System
- Adequate livelihood must be guaranteed against social risks.
- Social security benefits must be clear and understandable for everyone.
- Social security must provide good care through services such as TE and health and social services.
- The service system must support people’s opportunities to find and keep work and encourage participation.
- Services must be comprehensive, well-targeted, and effective.
- Benefit and service systems must be built in a socially and financially sustainable and fair way.
- Benefits and services must support the reconciliation of work and social security in changing life situations.
Developing Employment Services Is Central to Employment Policy
Increasing the employment rate requires well-targeted and expanded services for the unemployed and those at risk of unemployment. Employment for hard-to-place groups, such as older people, immigrants, and partially disabled individuals, can be facilitated by ensuring personalized services. Developing employment services is a key part of employment policy.
TE services refer to public labor and business services aimed at helping job seekers and employers find each other. Unemployed job seekers are offered job search assistance, their rights and obligations are ensured, and they are referred to other services when necessary.
Employment services were transferred from the state to municipalities at the beginning of 2025. In practice, services are often provided by employment regions formed by municipalities. The reform aims to bring services closer to local conditions and workplaces, thereby creating positive employment effects.
Based on employment figures, the benefits have not yet materialized. Knowledge of local conditions and connections to other employment-related functions can help municipalities achieve employment benefits.
Ways to Develop Employment Services
- Employment service resources must be raised to Nordic levels in the long term.
- Success in employment management must be assessed from the perspective of employment outcomes.
- Services and practices that promote employment should be utilized, while ineffective services should be reduced or improved.
- Links between employment services, education, and welfare services must be strengthened.
- The unemployed must have access to health checks and work ability assessments at an early stage.
- Especially during periods of high unemployment, new ideas and experiments are needed, such as a new state-owned employment company or public sector employment programs.
Securing Funding for Social and Health Services
Social and health services and rescue operations were transferred to the responsibility of wellbeing regions at the beginning of 2023 as part of the health and social services reform. The goal was to create high-quality and equal social, health, and rescue services nationwide, reduce health disparities, improve accessibility and availability, and curb cost growth.
However, it seems that cost containment has become the primary task of wellbeing regions. Service development and improved accessibility have taken a back seat. Regional differences in access to care are significant, and the risk of deeper inequality between regions is growing. To reduce care queues, funding has been directed to the private sector instead of supporting regions in meeting the stricter care guarantee.
Funding for wellbeing regions is insufficient to meet growing service needs. Regions under pressure to save have had to make painful cuts and prioritize services. In many regions, long-standing staff shortages have turned into significant staff reductions.
Wellbeing regions are responsible for the coping and well-being of social and health personnel. Without determined development of working conditions and leadership, it will not be possible to ensure sufficient staff in the future. Working conditions must be improved, and the attractiveness and retention of the sectors strengthened.
Promoting health and well-being creates the foundation for the population’s work and functional capacity, reduces well-being and health disparities, and maintains safety and inclusion. Adequate resources and multidisciplinary cooperation are needed to ensure access to care and strengthen primary health care.
Ways to Secure Funding and Develop Social and Health Services
- The public sector must remain the primary provider of social and health services.
- Services can be purchased from private providers when appropriate.
- The introduction of a regional tax should be considered as an incentive for wellbeing regions to curb cost growth.
- Regional equality must be developed nationally to ensure equal and timely access to services everywhere.
- Nursing leaders are needed to lead the largest staff group in social and health care.
- Trained nurse leaders and supervisors ensure staff availability, retention, and well-being.
- Primary health care and continuity of care must be developed.
Unemployment Security Is Insurance Against Unemployment
Unemployment security is a safety net that ensures livelihood. Its goal is to guarantee adequate income and care in the event of unemployment and when there is insufficient work available.
Unemployment security is part of social security and consists of various benefits and services. Benefits that may be granted to the unemployed include labor market support, basic daily allowance, and earnings-related unemployment allowance, as regulated by the Unemployment Security Act.
As work and society change, the unemployment security system must be actively developed. In addition to income and care, it is important to consider how unemployment security functions in different life situations and how participation, work ability, and skills can be developed during unemployment. Measures to prevent unemployment will become increasingly important in the future.
Labor market organizations play a key role in shaping working life and the social security system. It is important that unemployment security continues to be developed in dialogue with various societal actors and political decision-makers.
Ways to Develop Unemployment Security
- Earnings-related benefits must enable maintaining a reasonable standard of living during unemployment.
- The financial sustainability of the system must be ensured. In addition to basic security, a functional insurance-based earnings-related system is needed, and work must pay off.
- Skills development must be better integrated into unemployment security.
- This means investing in lifelong learning and providing the unemployed with more flexible and effective opportunities to study during unemployment.
- The unemployment security system must better address the needs of self-employed individuals and those in gig, part-time, and temporary jobs.
The Pension System Must Evolve with Society
A pension is a benefit paid to secure livelihood in old age, disability, or upon the death of a family provider. Statutory pensions consist of employment pensions and national pensions. Employment pensions accrue based on work performed.
Funding for employment pension security is based on a pay-as-you-go system, where most funding comes annually from employee and employer contributions, supplemented by previously accumulated funds and investment returns.
Labor market organizations negotiate both the content and funding of pension security. The employment pension system and ensuring pension security are important issues for employee organizations.
The Finnish employment pension system is fundamentally sound. However, it must evolve to meet the demands of a changing society to maintain its ability to pay pensions in the future. Increasing life expectancy, an aging population, and declining birth rates challenge our pension system. The goal is to ensure the financial sustainability of employment pensions well into the future.
Ways to Develop the Pension System
- To extend working careers, employment security must be improved, and measures to promote work ability must be implemented.
- Pension promises and the basic principles of the employment pension system must be upheld.
- Intergenerational fairness must be ensured.
- Gender inequality in pensions must be reduced.