Varma's core function
Varma's core function is to secure pensions. Our operations are based on work carried out in Finland and on securing the sustainability of the earnings-related pension system. We take care of the statutory earnings-related pension cover of private sector employees and self-employed persons. We invest the assets collected as pension contributions profitably and securely for present and future pensions. Varma is a sought-after and competent partner in workability management. Our goal is that the employees of our client companies are able to cope better and remain in working life longer.
Pension contributions pay pensions and a portion is set aside in funds for future pensions
The Finnish statutory earnings-related pension scheme is partially fund-based. The majority of the pension contributions paid by employers and employees are used to pay the pensions for that year. A portion of the contributions is set aside in funds for future pension payments. Approximately a quarter of the pensions under payment are financed through previously collected pension assets and the returns on them. A small portion of the contributions goes towards the operating expenses of the earnings-related pension system, i.e. the pension companies and the Finnish Centre for Pensions, and statutory fees.
By law, pension assets must be invested profitably and securely. Part of the investment returns is steered to strengthen pension liabilities and part is used to maintain the solvency, i.e. solvency capital, of the earnings-related pension company. Based on the solvency and operational efficiency of the pension company, it may grant client bonuses.
The YEL contribution paid by those who are self-employed is dedicated entirely to paying pensions for the current year, i.e. the assets are not set aside in funds.