The main mandate of the Unemployment Insurance Fund (TVR) to bankroll earnings-related unemployment benefits in Finland. Last year the fund was found to be 673 million euros in the red, more than 400 million euros more than estimated in its budget.
Increasing spending is the main driver behind the deep deficit. In 2014 the fund spent around 371 million euros more than anticipated. TVR deputy managing director Tapio Oksanen said that current estimates put the annual average increase in spending at around 10 percent.
The fund is also facing pressure on the income side: while spending in 2014 alone grew 23 percent compared to 2013, income decreased by 11 percent.
Benefit payments up by 500 mn in 2014
Last year TVR paid out 3.7 billion euros in earnings-related benefits, about 500 million euros more than in 2013.
“The fund’s counter-cyclical buffer has clearly been moving into debt. At the end 2014 the fund’s buffer was in debt to the tune of 11 million euros. At the end of 2013 the fund still had a surplus of 662 million euros, indicating the rapid growth in spending,” Oksanen said.
TVR officials say they plan to raise new debt financing via the bonds market.
The fund is overseen by a Supervisory Board representing four employers' groups and the three biggest labour federations.
At the end of January, Statistics Finland reported the unemployment rate at 8.8 percent, representing 230,000 people. However reporting data drawn directly from jobseekers registering with employment offices, the Ministry of Employment and the Economy posted the number of jobless persons at 360,000 for the same period.
