Steps to financial security
Finnish economic security can be classified as so-called. four-stage model, the first three stages include all or part of the social security system and the fourth overall savings. Reaffirmation of the future is an increasing role in both statutory and voluntary financial security of the acquisition.
The first step is a residence-based security such as Social Insurance. EU residence-based security is on average lower than in Finland. This security is a weakness of the financial foundation for the validity of the integration in a changing Europe. When the security funding, and security assets have not been contacted, payment morale is not as good as the earnings-related or other insurance-based security.
In addition, a high tax countries such as Finland are in practice to harmonize their taxes down, thus affecting housing-based security, maintenance of tax revenue. A certain degree of accommodation based security must always keep the welfare society, but its extent in the long run, under no circumstances be as high as it is today.
Employment-based security (second stage), the EU is the most common alternative, which also grow in Finland. The best known forms of this level of security is a statutory pension insurance (TEL). Also, the employer or the employer and employee jointly funded by the voluntary group pension belongs to that stair. The statutory earnings-related security generally funded entirely by employers and / or employees insured under a levy or insurance. There are exceptions such as agricultural and other entrepreneurs as well as sailors’ pensions, which are also financed through taxes.
The principle of insurance is particularly well suited earning security. Risk of social equality is a major risk to possess the same number of States. Receiving benefits requires the participation of financial security and benefits is determined by the level of contributions paid. The insurance principle is an integral part of the accumulation of reserves of insurance benefit costs for temporal smoothing.
Third step, ie tied to saving is designed to complement the compulsory social security – not to replace it. Beneficial use is tied to a predetermined purpose. In addition to completing it is characterized by voluntary and individuality. Security funding is fully funded. Its contributors are mostly domestic, but also partly by employers. Tied to saving is also a tax incentive. Generally, the payment is tax deductible, but the corresponding benefit is taxable.
Today, Finland, voluntary pension insurance is only the third stage of the product. But at the same stairs fit many other voluntary security complement, such as education, health care or medical expenses insurance. Also, different coping contribute to the rehabilitation of insurance may be considered. So far the government has not allowed verokannustetta other than Pensions.
The third level of security is growing all the time in society. Fragmentation of employment and generally increased uncertainty creates the need for citizens to build a unique addition to the statutory protection.
Financial security of the fourth stage includes the normal short-term or long-term saving. Insurance products for this include stair. endowment. The fourth level of savings may be the target savings for any purpose, and social support such savings in any way.
