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Scandal rocks Finnish local government pension fund Keva

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Merja Ailus, managing director at Keva, the €35bn local government pensions institution of Finland, may lose her job after local media revealed evidence of tax evasion, prompting the fund’s chairwoman, Laura Räty, to say she had lost trust in Ailus.

Last week, Finnish media reported that Ailus’s “fringe benefits” included two luxury flats in central Helsinki and a brand new BMW.

Further, the reports alleged that she failed to pay the appropriate taxes for the flats, and that “rules had been bent” in the acquisition of the BMW.

When starting at Keva in 2009, Ailus reportedly requested to live in a €2.3m flat and last year requested an increase of €6,100 on her monthly salary of €18,900.

Earlier this week, local media also came out with claims that Ailus received child benefits from Finland and Norway simultaneously for eight years, which Norwegian officials are now claiming back.

Ailus maintains she was unaware she continued to be paid the benefit after she moved away from Norway.

Earlier this week, Keva’s deputy chief executive Tapani Hellsten reacted to the news by announcing he would give up his fringe benefits – a luxury car and a flat – in exchange for an increase in salary.

Ailus said she would give up the car and the flats, but pointed out that, to low-earning pensioners, the fringe benefits of pension fund management might seem excessive.

Keva will convene and comment on the issue on 22 November.

Chairwoman Räty – who initially backed Ailus but recently changed tack – told IPE: “It is of the utmost importance that the management of a local pensions institution have sound judgement.

“On the basis of the conversations I have had with Ailus in recent days, as well as the newest developments in this matter, I can no longer say that Ailus’s judgement is up to our standards.” 

Despite Räty’s announcement, Ailus organised a press conference for Keva staff on Thursday morning, declaring that she had no intention of resigning.

Keva’s board will convene on Friday to discuss the issue, although several members of the board have announced that they agree with Räty.

The Ministry of Finance, the supervisory body for Keva, is also evaluating the situation and will make its recommendations in mid-December.

Keva has also set up an inquiry on its benefit culture.

Many in the Finnish pensions industry and media, however, have questioned the objectivity of an inquiry managed by the fund’s own finance Tom Kala, who is one of Ailus’s subordinates.

Keva insures 1.3m Finns working or having retired from local government jobs.

Ailus was appointed as managing director of the €35bn scheme in 2009 out of a group of 20 applicants.

Her appointment has been described as political, as she is a member of the Centre Party and arguably had less experience with the pensions industry than several other applicants.

IPE asked Ailus to comment on the situation, but received no reply.

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