The employer´s earnings-related pension contributions are temporarily reduced by 2.6 percentage points in 2020. The contribution reduction is valid from 1 May to 31 December 2020. The change does not require any action from the employer since it is handled automatically.
The reduction in the insurance premium would apply to the employer’s share of the earnings-related pension insurance premium and would not affect the employee’s earnings-related pension insurance premium.
To reduce the contribution, the equalization liability of the occupational pension scheme, which is a buffer at the level of the pension equalization pension scheme, would be used. The buffer would be increased again by temporarily increasing the employer’s contribution in 2022-2025 so that the effect of the temporary reduction could be fully offset.
The Act on Temporary Reduction of Insurance Contributions under the Employees’ Pensions Act in 2020 will enter into force on 1 May. and is valid until the end of 2025.
Pension cover is employer´s responsibility when hiring a foreign employee to come work in Finland, except when your employee is a posted worker arriving from an EU or EEA country, Switzerland or a social security agreement country.
Econia is happy to help you with opening insurances and advising on employer obligations if necessary.