Users say – earnings-related pension providers: having real-time data is the basic idea behind the Incomes Register

10/11/2021

Earnings-related pension providers need data submitted to the Incomes Register to carry out their basic tasks: the management of earnings-related pension insurance contributions, and the granting and calculation of pensions.

Key data includes income subject to earnings-related pension policies and data about its allocation, such as identifiers of income earners and payers, and the pension policy number. In addition, earnings-related pension providers require data about the end of employment, including the start and end dates, and the reason for the end of employment.

– Unfortunately, data about the end of employment is not, however, reported very exhaustively, which results in additional work and investigations when applying for pensions. In the earnings-related pension sector, we would certainly also use absence data if payers reported it in sufficiently comprehensive detail, says Mia Turku, development manager at Varma Mutual Pension Insurance Company.

There are also problems in reporting the income earner’s identifier and pension policy number, i.e. the number of the employer’s earnings-related pension policy.

– As a rule, the Finnish personal identity code should always be used as the income earner’s identifier. Similarly, the pension policy number, if any, should always be reported. If the employer has a valid policy, it should not submit reports to the Incomes Register as a temporary employer, but use the pension policy number related to the earnings-related pension insurance. This type of a situation always forces us to correct data, in which case we must request the data submitter to cancel the original report and submit a completely new report, Turku says.

Real-time data benefits everyone

In addition to granting pensions, earnings-related pension providers use the Incomes Register’s data to determine earnings-related pension insurance contributions. Earnings-related pension providers are largely operating in real time, determining insurance premiums monthly based on the Incomes Register’s data instead of the previous annual cycle.

– Having real-time data is huge for us in the earnings-related pension sector, and we would like to see other users of the Incomes Register’s data to join us increasingly in the world of real-time data, says Turku, who chairs the earnings-related pension sector’s background group this year and next year.

The real-time data enabled by the Incomes Register has had a significant impact on earnings-related pension providers’ processes and ways of working. For example, reports related to wages are received from the Incomes Register through the earnings-related pension sector’s shared background system. Through inputs, Varma, for example, has been able to automate system functions and achieve significant savings.

– In the earnings-related pension sector, we felt, at the very beginning, that the world of real-time data is our thing, and we saw that it benefits not only us, but also our customers as a whole. This also has significant benefits in society at large, says Turku, also encouraging other data users to get the most out of the opportunities of real-time data.

Everyone is responsible for the quality of data

Earnings-related pension providers hope that employers and other payers would report data correctly to the Incomes Register every time. Their second request is related to data monitoring: when data is monitored as effectively as possible and in real time, data submitters can correct any errors without unnecessary delays. 

– In the earnings-related pension sector, we determine and collect insurance premiums in real time. This means that, if any other data user requests a report to be corrected a year later, for example, the correction may also affect insurance premiums and ultimately even pensions. This is quite unfortunate for customers, and also for us, as changes can be made after such a long time, says Turku.

Not only employers as data submitters, but also the pay systems they use are in a key position.

– Pay systems must be able to effectively produce the data required for reports in a high-quality manner to enable the effective use of data. Every sector in which data is used should also consider how their process works and what they could do to improve the quality of data.

Eyes to the future

The earnings-related pension sector is eagerly watching what impact the penalty fee imposed this year for not reporting earnings payment data has.

– The ‘carrot’ in our sector for reporting data correctly is having correctly sized insurance premiums. For example, we monitor duplicate reports in our sector following a specific cycle. At least Varma’s customers have given a positive welcome to any requests for correcting duplicate reports, and customers have been quite effective in correcting their reports, Turku says.

Next, earnings-related pension providers will turn their eyes from the provision of benefits payment data to its use.

– We started by ensuring that data is produced correctly at the right time. As the reporting of data to the Incomes Register only started at the beginning of this year, the use of data is only taking its first steps in our sector.

The Incomes Register has had a significant impact on resources, processes and the automation rate in the earnings-related pension sector, and the sector also wants to be closely involved in the development of the Incomes Register. Alongside dialogue-based cooperation, the reliability of the Incomes Register and the rapid elimination of malfunctions are important themes for earnings-related pension providers.

– In the earnings-related pension sector, we have been good at giving ideas. Overall, our most central and critical needs have already been improved during annual changes. Considering corrections, not being able to change the payer identifier and the income earner’s identifier on the replacement report produced significant savings.

One of the earnings-related pension sector’s ideas is related to the development of reporting in the Incomes Register.

– To improve the quality of data, reporting should be considered more broadly. We can see potential simply in merging our data with the Incomes Register’s data. It would be very useful if this was piloted by a small group to see whether the merger of data would also benefit others, Turku says.

In the Users say series, organisations that use the Incomes Register’s data talk about the benefits and challenges of the use of data from their own perspectives.

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Page last updated 10/11/2021