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Helsinki (03.09.2020 - Heikki Jokinen) Three big unemployment funds have undertaken preparations to merge. If things go as planned, the new fund should start operating by the beginning of 2022.

The funds involved in the merger are the Public and Welfare Sectors’ Unemployment Fund (140,412 members at the end of 2019), the Unemployment Fund of Finnish Industrial Workers (139,172 members) and the Unemployment Fund of the Construction sector (45,590 members).

In total, the new fund will have some 326,000 members. Altogether 1.9 million Finns are members of unemployment funds.

All three funds are run by the trade unions which are members of the Central Organisation of Finnish Trade Unions SAK. The new fund would be the second largest out of the 24 wage and salary earners unemployment fund today, and the largest with a trade union background.

In their press release, the three funds say that behind the merger are many pressures focusing on legislation and unemployment security. These challenge the ways funds now work, the press release says.

The three funds also believe that this merger will provide more resources for this service. "One of the most notable goals of the merger is to offer members the best service within the branch."

Number of funds declining as time goes on

The memorandum of understanding concerning the merger was signed at the end of August. New statutes should be ready in January 2021 and actual decisions on the amalgamation should be taken in summer 2021.

One of the practical questions to be resolved is the membership fee. Now, members on a 3,000 euro monthly wage pay 119 euro a year into the Public and Welfare Sectors’ Unemployment Fund, 126 euro a year to the Unemployment Fund of Finnish Industrial Workers and 187 euro a year to the Unemployment Fund of the Construction sector.

In 2019, the tree funds paid out 403 million euro in benefits to 66,000 of their members. The funds employ some 250 people.

It is possible that some other SAK member unions funds will join the newly amalgamated fund later on. The decision might also encourage further merger plans among unemployment funds in the other trade union federations Akava and STTK.

The number of unemployment funds has been falling rapidly. In the year 2000, there were 48 funds in Finland, double that of today.

Three more funds are preparing to join forces at the beginning of 2021. The new fund Aaria will be a merger of the Unemployment Fund Statia, the JATTK Unemployment Fund and the Unemployment Fund for Public and Private Sector Employees JYTK. As a result Aaria will have 110,000 members.

This is not the only merger next year.The 15,000 member Unemployment Fund for Sales and Marketing Professionals will unite with the 200,000 member strong Unemployment fund for highly educated people, KOKO from the beginning of the year 2021.

The Unemployment Fund Act stipulates that a fund needs to have 8,000 members to receive state support. SAK proposed in June 2019 several reforms to the unemployment funds. One of the proposals was to raise the needed number of members to - for example - 50,000 members.

 

Read more:

SAK calls for improvements on the earnings-related unemployment security (13.08.2020)

Wolf in sheep's clothing, say unions of the employer's lobby EK new policy concerning unemployment funds (30.07.2020)

Right-wing party wants to sideline Union unemployment funds (06.03.2018)