This paper is an update of the book Lakisääteisen eläkevakuuttamisen vakuutustekniikkaa.
Since the last update of the book there have been major changes in Finnish
statutory earnings-related pension system. Most notable change is
legislation reform of Finnish statutory pension system in 2017. Another
major change was solvency regulation reform which changed the way solvency
requirements are calculated. There have also been several minor
tweaks in legislation and in actuarial principles along the years. All these
changes made the last version of the book outdated so motivation for this
paper was bring the book up to date.
The paper discusses the principles of funding of Finnish statutory pension
system on a general level. Paper also explains the legislative and
regulatory framework that defines the insurance technics applied in Finnish
statutory pension system. Main focus of this paper is to introduce
the chosen actuarial principles and related formulae in detail. Calculation
of insurance premiums and technical provisions as well as how equity linked
buffer fund and solvency requirements are defined are also covered
thoroughly in this paper. Also a so-called Z-model that models duration
of disability pensions is described in the paper.
Although paper mainly discusses Finnish statutory employees’ pension
insurance TyEL other types of insurance under statutory pension system
are also described in some detail.
This paper will be published by Finnish Centre for Pensions.