Wednesday, June 26, 2013
5.60 (PC Hoofthuis)
The Finnish mandatory earnings-related pension system TyEL has been throughout its half-century existence an exceptional case of both public-private pension provision and political economy of pensions. The scheme has served different kinds of economic and social policy interests in different times. Despite its public mandate and regulation, all the contributions and assets have been kept strictly in private hands, and the systems has thus served as a collective means for reallocating private resources. The TyEL scheme also illustrates the contingent relationship between the politics of the ‘asset side’ (i.e. investments and pension contributions) and the ‘liability side’ (i.e. pension benefits) of pension provision. The long-term development in the asset side can be best described as a process of financialization, in which investments have become to serve portfolio management prized risk management paradigms in contrast to previous real investment prized economic activities. However, in contrast to many other cases, this has not led to empowerment of the financial sector in general but only to the changing paradigms in TyEL investment processes, which are still influenced and shaped by national economic interests. At the same time, the Finnish pension politics as well as the administrative model of the TyEL scheme have continued to illustrate the corporatist public policy paradigms, but with changing economic and social policy priorities and roles in collective agreements.
