Pensions Questionnaire: Entrepreneurs do not trust the pension system, but also do not know that they receive significant state support

Suomen Yrittäjät commissioned a survey on entrepreneurs’ pension views.

Only about a third of entrepreneurs trust the pension system, according to a survey commissioned by the Finnish Association of Entrepreneurs.

10 percent of entrepreneurs and about 25 percent of entrepreneurs answered that they trust the system completely. More than 40 percent, on the other hand, said they doubted the system.

Entrepreneurs commissioned a survey in Kantari. 1,120 SME representatives responded to the survey.

The amount of the yel pension accruing to the entrepreneur depends on the earned income he or she declares, which also determines the amount of the entrepreneur’s pension contribution. In the survey, nearly half of entrepreneurs felt unable to pay enough pension contributions.

The level of earnings of entrepreneurs clearly varies. About one in three entrepreneurs reported earnings of less than € 2,000 a month. Every Fifth reported income of more than 5,000 euros per month.

Except Entrepreneurs’ confidence in the pension system also seems to be shaky in their knowledge of how it works.

In the survey, only 8 per cent fully agreed and 12 per cent somewhat agreed with the statement that the state pays part of the pensions of entrepreneurs. In reality, the state’s share of entrepreneurs’ pensions is already quite significant.

This year, the state will support the payment of entrepreneurial pensions with about 420 million euros. It accounts for almost a third of the cost of the system. Back in 2012, the state’s share was only 23 million euros.

The state manages the part of the entrepreneurs’ pensions paid each year that is not sufficient to cover the pension contributions paid by active entrepreneurs in the same year.

Entrepreneurs’ pension contribution rates are close to those of employees and employers. However, self-employed pensions have not been funded at all, while funds have been accumulated in the employees’ pension system for decades. In addition the Ministry of Social Affairs and Health considers the increase in the share of the state is due to the fact that so many entrepreneurs declare their earnings too low and therefore pay little pension contributions.

One the idea considered by the ministry has been to centralize the pension insurance of entrepreneurs in one pension institution.

The survey asked entrepreneurs whether they should set up their own pension institution. The idea was supported by 47 percent of respondents and opposed by 20 percent of respondents.

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