Finland imposes DC pensions on state company executives
FINLAND - The government has agreed new guidelines for the remuneration of executives in state-owned companies including a requirement that new pension schemes should be established on a defined contribution (DC) basis.
Recommendations on changes to the remuneration system published by a specialist working group in June, were taken into consideration in preparing the final rules. The proposals put forward for alterations to pension benefits were all adopted by the government. (See earlier IPE article: Management at state firms 'should switch to DC' - Finnish report)
The government's Cabinet Committee of Economic Policy announced that in line with general minimum retirement age provisions, top management retirement age in state-owned companies must now be at least 63 years of age.
It also confirmed that all new schemes for supplementary pensions "must be based, instead of a specific level of pension, on the so-called defined contribution forming a part of the total salary paid by the employer".
Supplementary pensions are used by some organisations as pension benefits are included in management contracts and state companies do not have their own pension fund.
Elsewhere a study by Nordea into Nordic savings habits revealed 70% of Finns place their savings in a bank account rather than a specialist fund, but only 20% are saving for a specific purpose.
The survey showed 39% of savers save in funds while 32% have a privately paid pension scheme, and although one in four invest their savings in shares, most appear satisfied with a return of at least 5% on their investment.
Findings from the study of 1,000 Finns revealed more than 50% do not think the financial crisis has affected their saving behaviour, although the least affected are those with only bank account savings.
However the study showed less than one third of respondents had increased their preference for savings alternatives with low risk.
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