Page 8 - Seafarers---_Pension_Fund_Annual_Report_2020_s

Annual Report of the Board Premium Income and Government Share

Seafarers’ Pension Fund 2020 Annual Report A total of 32 shipping companies were insured by the Seafarers’ Pension
Fund as employers; the number reduced by 4 from the preceding
Technical provisions year. Insurance contributions were paid for altogether 148 vessels, as
compared to 150 vessels in 2019.
Solvency
The number of insured employees totalled 6,363 persons (7,405
in 2019). The significant decrease in the number of insured persons
was largely due to the impact of the COVID-19 pandemic on Finnish
navigation. Within the passenger ship sector, a major part of the
employees have been laid off since spring 2020.

The pandemic had a significant effect on the payroll, which reduced
by more than 24%. In 2020, the payroll for navigation totalled EUR
206.2 million. Accordingly, the MEL insurance contributions paid by
employers amounted to EUR 23.3 million and those paid by employees
to EUR 15.9 million. Thus, the premium income of the Fund totalled
EUR 39.2 million. The premium income reduced by EUR 15.3 million
(28.1%) from the preceding year.

As a result of the reform of the seafarers’ pension system in 2016,
the MEL insurance contributions for seafarers are at the same level as
the contributions payable under the Employees Pensions Act (TyEL).
The contribution percentage for shipping companies as employers is
determined by the Ministry of Social Affairs and Health, upon the
proposal of the Seafarers’ Pension Fund.

In 2020, the percentages for MEL contributions paid by seafarers
were 7.15% for employees under 53 years and over 62 years, and 8.65%
for those aged 53–62 years.

The following table shows the development of the contributions payable
by employers.

Year 2016 2017 2018 2019 2020 2021
Shipowner/ 16.7 15.4 13.2 12.8 11.4 11.4
employer’s
MEL contribution, %

Since 2016, the State has funded 31% of the pensions paid under MEL.
In 2020, the State provided EUR 61.1 million for the payment of MEL
pensions. In 2021, the government share will decrease to 29% of the
pension expenditure.

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