Annual Report

1 Jan–31 Dec 2023

2023

2Annual report 2023 Contents

Contents

ANNUAL REPORT 2023

3 The year of Employment Fund in

brief

4 Managing Director’s review

7 Keyfigures2023

8 Strategy, mission, vision and

values

11 REPORT OF THE BOARD OF

DIRECTORS

12 Duties of Employment Fund

14 Cooperation with stakeholders

15 Customer service at Employment

Fund

17 Unemployment insurance

contributions

25 Adulteducationbenefits

35 Finance

38 Investment activities

41 Sustainability

46 Risk management

48 Personnel

51 Eventsafterthefinancialperiod

52 Corporate governance

65 Remuneration report

70 FINANCIAL STATEMENTS

71 Financial Statements (IFRS) 2023

74 Notestothefinancialstatements

115 Auditor’s report

3Annual report 2023

The year of Employment Fund in brief

The employment situation in Finland remained good and as a result, the

Fundpostedaclearprofitsurplusfortheyear.

The announced abolition

ofadulteducationbenefits

prompted a major change

projectintheFund.

We provided EUR

2,934

million for the funding

of unemployment and

pension security and

adulteducationbenefits.

From the beginning of

the year, we have been

collecting transition

security contributions from

employerstofinancethenew

transitionsecurityscheme.

Key matters in 2023

4Annual report 2023

Managing Director’s review

Employment Fund experienced successes

and achieved many of its objectives during

2023.However,theFundalsoexperienced

unpleasant surprises that changed our

plansforthesecondhalfoftheyear.

At the start of the year, we successfully

deployed our new information system for

collecting and processing transition secu-

ritycontributions.Weincreasedthedegree

of automation in the processing of appli-

cations for adult education allowances and

extended the automated decision-making

to applications for continued eligibility for

theallowance.

Employment Fund’s Board of Directors

approved the new strategic objectives for

theFundinMay.Inlinewiththeupdated

objectives, we produce digital services reli-

ably and with high quality, we increase pro-

ductivityandefficiency,wecreateanexcel-

lentcustomerandpersonnelexperience.

In our role as an executor of social security,

we put great emphasis on social responsi-

bilityinouroperations.In2022and2023,

we prepared a sustainability concept for

the Fund to support the achievement of the

sustainable development goals set by the

UNinits2030Agenda.Sustainabilityis

alsoreflectedinsuchareasasourinvest-

mentactivities,acquisitionofdebtfinanc-

ing,andourequalityanddiversitywork.

CUSTOMER SURVEY PRODUCED

NEW INFORMATION ON THE USE OF

ADULT EDUCATION ALLOWANCES

In spring, we examined why recipients of

adult education allowance decide to take

up studies, how they perceive the impact of

the allowance on work careers and wheth-

er they feel that they have achieved their

goals.Thiswasthefirstsuchsurveyin

the history of the adult education allow-

anceandnearly5,000personstookpart.

Career changing plans, high work load

experienced in the current job, and the

desire for career advancement were

5Annual report 2023

key reasons behind the decision to take up

studiesduringtheworkcareer.Quantita-

tive and qualitative responses showed that

the recipients use the allowances respon-

sibly and in a diverse manner to tackle

challengesarisinginworkinglife.

We published the results of the customer

survey on the perceived impact of the adult

education allowances in a seminar on 15

June.TheProgrammeofPrimeMinister

Petteri Orpo’s Government was published

the following day and it was stated in an

appendix to the document that the adult

education allowance scheme would be

abolished.Thiswasfollowedbyanan-

nouncement that the scholarship scheme

forqualifiedemployeeswouldalsoend.

ABOLITION OF THE ADULT EDUCATION

BENEFITS IS A MAJOR CHANGE FOR

THE FUND AND OUR CUSTOMERS

Discontinuation of the adult education

benefitsisamajorchangeforEmployment

Fund even though our other statutory tasks

willnotbeaffected.Terminationofthe

allowance scheme will also have substan-

tialimpactsonourpersonnel.Infact,the

focus in the second half of 2023 was on

change management and preparation for

thechange.Atthesametime,weproduced

information on the implementation of the

adult education allowance scheme for the

media and our stakeholders, compiled an

assessment of various development pro-

posals, and communicated extensively

withourcustomers.

The Government proposal for the act abol-

ishingtheadulteducationbenefitswas

submittedtoParliamentinFebruary2024.

Thefinalformandapprovaloftheactare

still pending, and it has not yet been decid-

ed whether the adult education allowance

scheme will be replaced with other types of

support.TheMinistryofSocialAffairsand

Healthhasappointedaworkinggroupto

examine how continuous learning should

besupported.Theworkwillbeconcluded

attheendofMarch2024.

Managing Director’s review

6Annual report 2023

POSITIVE TREND IN EMPLOYMENT

ALLOWED SUBSTANTIAL LOWERING

OF UNEMPLOYMENT INSURANCE

CONTRIBUTIONS FOR 2024

For Employment Fund, the year 2023 was

characterised by good economic perfor-

mance.Theemploymentsituationre-

mained good and as a result, the Fund

posted a clear surplus for the year and our

business cycle buffer was approaching its

maximumamount.Moreover,theeconomic

and employment outlook as well as the fact

that the measures set out in the Govern-

ment Programme are estimated to decrease

expenditure prompted us to propose a sub-

stantial reduction in unemployment insur-

ancecontributionsfor2024.

The changes to unemployment security en-

visaged in the Government Programme will

havelimitedimpactontheexpenditurefi-

nanced by the Fund in 2024, but the impact

willbegreaterinthecomingyears.

In autumn 2023, a working group was ap-

pointed to examine how the savings accu-

mulated by social insurance funds could be

channelledtobenefitcentralgovernment

finances.Aspartitswork,theworking

group is also examining the channelling of

the savings accumulated by Employment

Fund.Wehaveprovidedtheworkinggroup

with information on our activities and held

discussionswithpublicofficials.Thetasks

of Employment Fund are laid down in the

law.Ourmaintaskistofinanceunemploy-

ment security and other separately speci-

fiedsocialsecuritywiththeunemployment

insurance contributions that we collect

fromemployersandemployees.Allassets

that we collect are intended for the fund-

ing tasks that we carry out as part of our

statutoryobligations.Itisimportantthat

under the legislation based on the working

group’s proposals and the Government’s de-

cisions, the Fund will be able to manage the

financingofunemploymentsecurityand

other social insurance and to use the busi-

nesscyclebuffertobalancefluctuationsin

contributions.

The activities of Employment Fund are

based on the work input of skilled and com-

petentpersonnel.Duringthesecondhalfof

2023, we lived in uncertainty trying to pre-

pare for the change without knowing the

finalcontentoftheproposalforabolishing

theadulteducationbenefits.Ourpersonnel

are change-capable and work together for a

commongoal.Workingtogetherisourkey

resource.Thisisdemonstratedbythefact

that despite the change and uncertainty, we

were able to provide our customers with an

excellent customer experience and perform

allourstatutorytasksimpeccably.

JANNE METSÄMÄKI

Managing Director

Managing Director’s review

7Annual report 2023

Key figures 2023

Keyfigures2023

ThefiguresareinEURmillion.

Income 2019 2020 2021 2022 2023 Change EUR Change %

Employer contribution income 1,238 993 1,160 1,327 1,413 86 6%

Employee contribution income 1,379 1,073 1,241 1,424 1,490 66 5%

Government contributions 688 1,248 911 717 704 -13 -2%

Liability component and transition security contribution

income

39 26 23 22 20 -2 -9%

Total income 3,345 3,340 3,335 3,491 3,627 137 4%

Expenses 2019 2020 2021 2022 2023 Change EUR Change %

Unemployment funds, Employment Fund’s contributions -954 -1,372 -1,463 -1,039 -1,098 60 6%

Unemployment funds, government’s contributions -685 -1,245 -909 -714 -700 -14 -2%

Finnish Centre for Pensions -577 -870 -902 -596 -600 4 1%

Social Insurance Institution of Finland -206 -207 -239 -243 -263 20 8%

Adulteducationbenefits -187 -197 -186 -189 -201 12 6%

Ministry of Economic Affairs and Employment -24 -25 -14 -20 -30 10 52%

State Pension Fund -8 -9 -11 -8 -8 -1 -6%

Administrative expenses -19 -21 -26 -23 -34 11 48%

Total expenses -2,659 -3,947 -3,750 -2,832 -2,934 102 4%

Net financial income 8 -16 3 -34 69

Change in net position 694 -623 -412 625 763

Net position 2019 2020 2021 2022 2023 Change EUR Change %

Investment assets and cash and cash equivalents 1,020 1,831 1,339 1,885 1,869 -16 -1%

Receivables,accrualsandfixedassets 725 593 679 818 859 42 5%

Short-term and long-term loans 0 1,287 1,299 1,299 599 -700 -54%

Unemployment insurance contribution and other liabilities 78 92 86 146 109 -38 -26%

Net position 1,668 1,045 633 1,258 2,021 763 61%

8Annual report 2023

Strategy, mission, vision and values

The strategy of Employment

Fund comprises its mission,

vision, strategic goals and

values.

Our mission is to

provide security for

changes in working life

.Ourvisionistobe

asuperiorexecutorofsocialsecurity.

Ourvaluesare:ourcustomerscomefirst;

werenew,weevolve,weact;weareaunited

team.

In May 2023, the Fund’s Board of Direc-

tors approved our updated strategic goals,

which are based on the strategy and sce-

narioworkstartedin2022.Wesummarised

our strategic goals as follows:

• We produce digital services reliably and

withhighquality.

• Weincreaseproductivityandefficiency,

we create an excellent customer and

personnelexperience.

The emphasis in our objectives is on ef-

ficientandreliablemanagementofour

statutory tasks and utilisation of digitalisa-

tion.Theimportanceofthecurrentdevel-

opment projects and the aim of enhancing

ourITcapabilitiesarealsoreflectedinthe

objectives.

Providing security

for changes in

working life

9Annual report 2023

Employment Fund’s strategy

Values

Vision

Superior

executor of

social security

Our customers

come ﬁrst

We renew

We evolve

We act

We are a

united team

Strategic goals

Mission

Providing security for

changes in working life

Forces of change

Evolving requirements for competences and education

Changes in the social security system

Fragmentation and unpredictability of political decision-making

Changes in education and study methods

Changes in work, working life and livelihood

Development, stability and requirements of the ﬁnancial markets

Sosioeconomic polarisation of regions and citizens

Expectations of customers and stakeholders, changes in consumer behaviour

Requirements/expectations for public service integration − one-stop shop

We increase productivity and efﬁciency,

we create an excellent customer and

personnel experience

We produce digital services

reliably and with high quality

Strategy, mission, vision and values

10Annual report 2023 Strategy, mission, vision and values

We update the integrations and architec-

ture and implement the changes and meas-

uresspecifiedintheregulatoryframework.

We increase the level of automation in a

controlled manner to improve services and

toboostefficiency.

Thanks to our efforts, the customer expe-

rienceisnowatagoodlevel.Wearedeter-

minedtoimproveitfurther.Enhancingthe

employee experience is also a key objective

ofEmploymentFund.

In 2023, we promoted our objectives by

proceeding with strategic development

projects and by strengthening the IT capa-

bilitiesrequiredaspartofdigitalisation.

We monitored the achievement of these

goals,givingprioritytoefficiency,customer

experience, and staff satisfaction indica-

tors.TheFund’sBoardofDirectorsmoni-

tors progress on the objectives on a regular

basis and assesses the need to update the

strategyinitsstrategymeetingeachyear.

MISSION

Providing security for

changes in working life

VISION

Superior executor of social

security

VALUES

Ourcustomerscomefirst

We renew, we evolve, we act

We are a united team

Thanks to our efforts, the customer

experienceisnowatagoodlevel.

Report of

the Board of

Directors

12Report of the Board of Directors 2023

Duties of Employment Fund

Employment Fund’s main

dutiesaretofinance

unemploymentbenefits,

determine and collect

unemployment insurance

contributions, and grant adult

educationbenefits.

We collect the unemployment insurance

contributions paid by employers and em-

ployees.Wedeterminetheunemployment

insurance contributions on the basis of the

information reported by the employers to

theIncomesRegister.Parliamentapproves

the contribution rates by passing a bill on

thecontributionseachyear.

The Fund maintains a business cycle

buffer arising from the difference between

its income and expenses, and its purpose

is to keep increases in contributions at

moderatelevels.Withthebuffer,wecan

ease the upward pressure on contributions

when unemployment security expenditure

increases.

ThebenefitsfinancedbyEmploymentFund

include the unemployment allowance paid

by unemployment funds and the Social

Insurance Institution of Finland as well as

the adult education allowances and schol-

arshipsforqualifiedemployeespaiddirect-

lybytheFund.EmploymentFundisalso

responsibleforfinancingthetransition

securityscheme.

According to the Programme of Prime Min-

ister Petteri Orpo’s Government, the adult

education allowance scheme will be abol-

ishedfrom1August2024.Thescholarship

schemeforqualifiedemployeeswouldalso

bediscontinuedfromthesamedate.

Wearealsoresponsibleforfinancingthe

earnings-related pensions accrued during

the periods when daily unemployment

allowances, job alternation compensation

andadulteducationallowancesarepaid.

We remit a payment amounting to the basic

daily allowance paid by the state to contrib-

ute to the daily unemployment allowances

paidbyunemploymentfunds.

Employment Fund’s operations are su-

pervised by the Financial Supervisory

Authority.

6.8%

7.7%

6.8%

7.2%

EUR

million

500

1,000

1,500

2,000

2,500

3,000

2019 2020 2021 2022 2023

Employment Fund’s ﬁnancing

for unemployment funds

Financing contributions paid to

unemployment funds, EUR million

Unemployment rate, %

1,639

2,618

2,372

1,753

1,799

7.7%

13Report of the Board of Directors 2023 Duties of Employment Fund

14Report of the Board of Directors 2023 Cooperation with stakeholders

Cooperation with stakeholders

Employment Fund cooperates extensively

withabroadrangeofdifferentparties.Inthe

management of our statutory tasks, we work

closely with ministries, especially the Min-

istryofSocialAffairsandHealth,Ministryof

Economic Affairs and Employment, Ministry

of Education and Culture and the Ministry of

Finance.

We are part of Finland’s statutory social

insurancescheme.Inthesematters,we

cooperate with unemployment funds, Social

Insurance Institution of Finland, Finnish

Centre for Pensions, Finnish Workers’ Com-

pensation Center and pension insurance

companies.Ourroleasaguarantorofliquidi-

ty requires smooth and effective cooperation

withbanksandfinancialinstitutions.Labour

market central organisations participate in

the administration of Employment Fund and

wecooperatewiththeseorganisations.

In our role as the payer of adult education

allowances, we cooperate closely with

education institutions, and we also collab-

orate with the Service Centre for Contin-

uousLearningandEmployment(SECLE).

Last year, we took part in SECLE’s letter

campaign, which was directed at individuals

withonlybasiceducation.

Asthepartyresponsibleforfinancingthe

transition security scheme, we arranged a

transition security event for unemployment

funds in January, and in April, we provid-

ed information on transition security in an

event organised for entrepreneurs by the

Federation of Finnish Enterprises and the

Employment and Economic Development

Office.

We use a regular newsletter to communicate

with Members of Parliament and employers

paying unemployment insurance contribu-

tions.Overthepastfewyears,wehaveor-

ganised webinars for education institutions

and customers applying for adult education

allowance.Bymakingcustomeradvicemore

effective, webinars supplement other availa-

bleserviceschannels.

In spring 2023, we conducted a customer

surveytofindoutwhatpromptsrecipientsof

adulteducationallowancetotakeupstudies.

Nearly 5,000 persons took part in the survey,

whichwasthefirstofitskind.Wepublished

thesurveyfindingsontheperceivedimpact

of the adult education allowance in a semi-

narinHelsinkiinJune.Intheseminar,we

heard the views of adult education allowance

recipients and met with experts to deter-

mine what the results mean for individuals

andsocietyatlarge.Aftertheannouncement

that the adult education allowance scheme

would be abolished, it became essential to

findoutmoreaboutthematter,andthenum-

ber of information requests coming from

the media and stakeholder representatives

increasedsubstantially.Wealsoproduced

information on the use of adult education al-

lowanceforsocialmediaandpublicdebate.

Our goal is to act as an interesting source

of information for the media in matters

concerning employees’ social security, un-

employment insurance contributions and

competencedevelopment.Weprovideand

deliver information to the media and oth-

er stakeholders and publish regular press

releases.InAugust,weheldamediaeventon

unemployment insurance contribution rates,

financingofunemploymentinsurance,and

theadulteducationallowancescheme.

15Report of the Board of Directors 2023

Customer service at Employment Fund

We continued to develop

different aspects of the cus-

tomer experience and service

processes.

CUSTOMER SATISFACTION

AT EXCELLENT LEVEL

In 2023, our focus was on enhancing the

customer experience based on the results

ofcustomerexperiencesurveys.Wealso

worked to ensure the best possible service

level, when it comes to our customer

servicechannelsandprocessingtimes.In

the background, we streamlined customer

service paths and internal processing and

increasedprocessautomationinbenefit

services.

As a result of these development measures,

customer satisfaction with our services re-

mained at an excellent level throughout the

year even though the announcement that

theadulteducationbenefitswouldbeabol-

ishedincreasedourworkload.Thecustom-

er satisfaction score (CSAT) indicating the

percentageofsatisfiedandhighlysatisfied

customers of all customers stood at 85% for

2023asawhole.

The highest customer satisfaction score

was recorded among the users of unem-

ploymentinsuranceandbenefitservice

telephoneservice.Forthem,CSATre-

mainedabove90%throughtheyear.The

unemployment insurance online service

and the submitting of information by

employers for adult education allowance

applications were the areas with the lowest

customersatisfactionscores.Bymaking

changes to the employer process of the

adult education allowance, we were able

toincreaseCSATfrom61%(in2022)to76%.

The service design process, which will start

Customer service at Employment Fund

16Report of the Board of Directors 2023

in2024,isthefirststageoftheunemploy-

mentinsuranceonlineservicereform.

MOST OF THE CUSTOMER SERVICE

WAS PROVIDED IN WRITING

The year 2023 did not bring major changes

to the volumes or priorities of customer

service.Mostofthecustomerserviceis

provided in writing through online ser-

vices.Thenumberoftelephonecontacts

remained at previous years’ levels or even

declined slightly whereas the usage of the

written customer service has remained

unchanged or decreased slightly, depend-

ingonthemonth.Theonlymajorpeakin

demand for customer service was expe-

rienced in August in connection with the

announcement of the abolition of the adult

education allowance scheme and the start

ofstudiesinautumn.Thatmonth,theben-

efitservicereceived7,117customermes-

sagesand4,766customercalls.

Mostofthecustomerserviceonbenefit

services was provided via the messaging

functionality.In2023,wereceivedatotalof

62,789(64,592)messages.Wecontinuously

developed the messaging functionality so

that we would be able to process all incom-

ingcontactseffectively.Customersatisfac-

tion with the messaging service increased

andstoodat81%(74%)in2023.

In advice on unemployment insurance

matters, the telephone channel is still more

popularthantheonlineservice.Onereason

is probably because judging from the cus-

tomer feedback, there is room for improve-

ment in the online service and we will meet

these needs in the overhaul of the online

service.

The telephone service for unemployment

insurance matters received a total of 12,033

(12,783)callsin2023.In12%ofthem,the

customer chose the callback option instead

ofwaitingonhold.Thenumberoftele-

phoneinquiriesconcerningbenefitsalso

remained at the same level as in previous

years.In2023,weanswered31,950(36,254)

callsconcerningbenefits.Thecustomer

may leave a callback request to avoid wait-

ingonhold.Atotalof14%ofthecustomers

callingthebenefitserviceschosethecall-

backoptionin2023.Inbenefitservices,our

averagecallbackratewas87%.

The amount of incoming paper mail has

been declining over the past few years

and it now mainly consists of additional

information sent in connection with adult

educationbenefitmatters,taxcardsand

documentssentbystakeholders.

In addition to customer service, we also

gave a high priority to customer com-

munications.Thiswaspromptedbythe

announcement that the adult education

benefitswouldbeabolished.Wearranged

several webinars on the adult education

allowance scheme, and they attracted a re-

cord number of participants during the last

monthsof2023.Wealsoproducedcontent

for our social media channels, developed

our website contents and sent newsletters

to such customer groups as educational

institutions.Successfulcustomercommu-

nicationshavemadeitsignificantlyeasier

for the Fund to manage its service capacity

incustomerserviceadvisorychannels.

Customer service at Employment Fund

17Report of the Board of Directors 2023

Unemployment insurance contributions

Employment Fund determines

and collects the unemployment

insurance contributions and

ensures that the employers

manage their obligations

concerning the unemployment

insurancecontributions.

The obligation to pay unemployment in-

surance contribution is based on the Act

onFinancingofUnemploymentBenefits

(555/1998).Unemploymentinsurancecon-

tributions are paid by employees aged be-

tween18and64aswellastheiremployers.

The employer was liable to pay the unem-

ployment insurance contributions if the

wages paid by it exceeded EUR 1,400 during

2023.Nounemploymentinsurancecon-

tributions are paid from an entrepreneur’s

earnings.Part-ownersasdefinedintheUn-

employment Security Act (1290/2002) are

obligated to pay unemployment insurance

contributions, but they pay the lower rate

paidbyemployees.

All wages, bonuses or similar compen-

sation that have been paid or have been

agreed to be paid during employment or a

service relationship as compensation for

work are considered income that can be

used as a basis for unemployment insur-

ancecontributions.

The employer deducts the employee’s un-

employment insurance contribution from

the employee’s wages when paying the

wages and reports the earnings payment

datatotheIncomesRegister.Wedetermine

the employer’s unemployment insurance

contributions on the basis of the earnings

payment data obtained from the Incomes

times each year (in January, April, July and

October) on the basis of the wages paid in

thepreviousthreemonths.

18Report of the Board of Directors 2023

Thanks to the Incomes Register, the pro-

cess has been extensively automated: A

totalof99.1%(98.4%)ofthedecisionson

contributions were issued automatically in

2023.

UNEMPLOYMENT INSURANCE

CONTRIBUTION IN 2023

While the unemployment insurance contri-

butions remained at 2022 levels, a separate

0.03percentagepointincreasewasinclud-

ed in the employer’s average contribution

tofinancethetransitionsecurityscheme

thatenteredintoforceon1January2023.

In 2023, the unemployment insurance con-

tribution income collected from employers

totalled EUR 1,413 (1,327) million and the lia-

bility components and transition security

contributions paid by employers amounted

toEUR20(22)million.Theunemployment

insurance contributions paid by employees

totalledEUR1,490(1,424)million.

Unemployment insurance contributions

EUR

million

500

1,000

1,500

2,000

2,500

3,000

3,500

2019 2020 2021 2022 2023

Unemployment insurance

contributions collected

Employers

Employees

2,657

1,379

1,073

1,241

1,424

1,490

1,433

1,349

1,183

1,019

1,278

2,092

2,424

2,773

2,923

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2019 2020

2021

2023

2021

2022

Employers

Employees

Unemployment insurance

contribution rates

1.50%

1.25%

1.42%

1.51%

1.54%

1.25%

1.40%

1.50%

19Report of the Board of Directors 2023

UNEMPLOYMENT INSURANCE

CONTRIBUTION RATES WILL

BE LOWERED IN 2024

In August 2023, we proposed that the un-

employment insurance contributions for

theyear2024shouldbeloweredby1.4per-

centagepoints.Theproposalforlowering

the contributions was made possible by the

outlook for the economy and employment,

the assets that had accumulated in the

Fund’s business cycle buffer and the fact

that the measures set out in the Govern-

ment Programme are estimated to decrease

expenditure.PresidentoftheRepublicap-

proved the act on the contributions for 2024

inDecember2023.

Unemployment insurance contribution rates (%) 2022 2023 2024

Employee’s unemployment insurance contribution 1.50 1.50 0.79

Employer’s unemployment insurance contribution, lower (1) 0.50 0.52 0.27

Employer’s unemployment insurance contribution, higher (2) 2.05 2.06 1.09

Employer’s average unemployment insurance contribution 1.51 1.54 0.82

Employee’s unemployment insurance contribution for part-owners 0.74 0.75 0.43

Employer’s unemployment insurance contribution for part-owners 0.50 0.52 0.27

Unemployment insurance contribution for unincorporated state

enterprises, lower (1) 0.50 0.52 0.27

Unemployment insurance contribution for unincorporated state

enterprises, higher (2) 1.18 1.22 0.65

Unemployment insurance contribution for universities, lower (1) 0.50 0.52 0.27

Unemployment insurance contribution for universities, higher (2) 1.49 1.52 0.71

(1)UptoapayrollofEUR2,197,500(2022);EUR2,251,500(2023);andEUR2,337,000(2024).

(2)ExceedingthepayrollofEUR2,197,500(2022);EUR2,251,500(2023);andEUR2,337,000(2024).

20Report of the Board of Directors 2023

SUPERVISION OF UNEMPLOYMENT

INSURANCE CONTRIBUTIONS

Employment Fund supervises that the

employers meet their obligations to pay the

unemploymentinsurancecontributions.

The purpose of the supervision is to ensure

that the earnings payment data reported by

the employers as a basis for the unemploy-

ment insurance contributions correspond

to the actual wage payments and that we

are able to collect the unemployment insur-

ancecontributionsincorrectamounts.

We check the accuracy of the earnings pay-

mentdatareportedtotheIncomesRegister.

If we notice that an employer has report-

ed earnings payment data to the Incomes

er in question and examine the earnings

paymentdatainmoredetail.Inaddition

to the Incomes Register data, Employment

Fund also uses information on employers

received from other authorities and social

insurance providers in its supervisory

activities.

We provide employers with advice on

matters concerning the payment obligation

andthereportingofwages.Theincorrect

earnings payment data is usually the result

of errors in the payroll system, misunder-

standings concerning the payment obliga-

tion,orothererrors.

In 2023, we investigated 894 (640) cases

forsupervision.Basedonthesupervision,

we ordered additional payments totalling

EUR 289,646 (EUR 251,050) and paid refunds

amountingtoEUR16,087(EUR16,087).

Unemployment insurance contributions

In 2023, we investigated 894 (640)

casesforsupervision.

21Report of the Board of Directors 2023

EMPLOYER’S LIABILITY COMPONENT

If an employee close to the retirement age

has been dismissed or laid off and is fac-

ing long-term unemployment or a long-

term lay-off, Employment Fund can order

the employer in question to pay a liability

component and collect it from this employ-

er.Weuseliabilitycomponentpayments

tofinanceunemploymentbenefitexpens-

esresultingfromdismissalsandlay-offs.

Provisions on determining the liability

component and the collection procedure

are laid down in chapter 8a of the Act on

theFinancingofUnemploymentBenefits

(555/1998).

Under the legislative changes approved by

Finnish Parliament in 2022, the right to the

additional days of unemployment security

willbeabolished.Thisalsomeansthatthe

collectionofliabilitycomponentswillend.

The new statutory transition security con-

tribution for employers dismissing employ-

ees will replace the liability components

duringatransitionperiod.Employeesborn

in 1964 are the last age group eligible for

the additional days and for whom the em-

ployer is obliged to pay the liability compo-

nent.Thetransitionperiodfortheliability

componentwillendbytheyear2035.

We received about 6,700 (9,700) new liabil-

itycomponentcasesin2023.Weimposed

a liability component on the employer in

about1,000(1,300)cases.Thenumberof

cases decreased because the transition pe-

riod preceding the abolition of the liability

componentbegan.

We recorded about EUR 14 (22) million in

liabilitycomponentsin2023.Theaverage

processing time in cases that led to a pay-

mentdecisionwas46(50)days.

TRANSITION SECURITY CONTRIBUTION

FOR EMPLOYERS DISMISSING EMPLOYEES

We started to collect the transition security

contribution from employers dismissing

employeesinJanuary2023.Provisions

on determining the transition security

contribution and the collection procedure

are laid down in chapter 4a of the Act on

theFinancingofUnemploymentBenefits

(555/1998).

Unemployment insurance contributions

The transition period for the liability component

willendbytheyear2035.

22Report of the Board of Directors 2023

The employer may be obliged to pay the

transition security contribution if the em-

ployer has dismissed an employee aged 55

oroveronproduction-relatedorfinancial

grounds and the employee had been em-

ployed by the employer in question for at

leastfiveyears.Wecollectthetransition

securitycontributionstofinancetheem-

ployee’stransitionsecuritypackage.The

transition security package consists of

transition security training and transition

securityallowance.TheEmploymentand

EconomicDevelopmentOfficeprovidesthe

dismissed employee with transition secu-

rity training corresponding to two months’

pay.TheSocialInsuranceInstitutionof

Finland or the unemployment fund will

also pay the employee a transition security

allowance corresponding to one month’s

pay.

We received about 1,000 transition security

casesin2023.Weorderedtheemployerto

pay a transition security contribution in

about500cases.

We recorded about EUR 6 million in tran-

sitionsecuritycontributionsin2023.The

average processing time in cases that led to

apaymentdecisionwas75days.

RECONCILIATION BASED ON THE

EMPLOYMENT CONTRACTS ACT

An employer that has laid off an employee

or ended an employee’s employment con-

tract in violation of the provisions of the

Employment Contracts Act is liable to pay

compensationtotheemployee.Atotalof

75% of the compensation is deducted from

the earnings-related daily unemployment

benefitspaidtotheemployeeafterthe

employment relationship has ended when

compensation is paid for salary losses due

tounemployment.Theemployerpaysthe

deductiontoEmploymentFund.

The reconciliation based on the Employ-

ment Contracts Act is made when a court

orders payment of compensation or when

the parties to the dispute agree on a com-

pensation.ThecourtmustconsultEmploy-

ment Fund if after the end of the employ-

ment relationship or for the duration of

the lay-off, the plaintiff has received earn-

ings-relatedunemploymentallowance.We

issued 718 (640) statements and contract

commentsin2023.

Unemployment insurance contributions

23Report of the Board of Directors 2023

TRAINING COMPENSATION

The purpose of the training compensation

is to improve the employer’s opportuni-

ties to organise training for its employees

so that they can enhance their vocational

competence.Thetrainingcompensation

can be paid to employers that are not eli-

gible for employer’s training deduction in

taxation (such as municipalities, wellbeing

services counties, parishes, associations

andfoundations).

An employer may apply for training com-

pensation from Employment Fund each in-

surance year by the end of January follow-

ingtheinsuranceyear.EmploymentFund

grants and pays the training compensation

based on the application submitted by the

employer.

In2023,wepaidEUR10.2(8.8)millionin

training compensation to 616 (591) employ-

ersfortrainingdaysin2022.Theemploy-

ers eligible for the compensation applied

for compensation on the basis of 451,522

(407,738)trainingdays.Oftheemployers

that received training compensation, 304

(308)werecitiesandothermunicipalities.

Unemployment insurance contributions

In2023,wepaidEUR10.2(8.8)million

in training compensation to 616 (591)

employersfortrainingdaysin2022.

24Report of the Board of Directors 2023

EUR

1,490

1,433

were paid by empolyers

51% 49%

Uncollected contributions

accounted for

0.2%

Our aim is to have efficient digital services and satisfied customers

UNEMPLOYMENT INSURANCE CONTRIBUTIONS

WERE PAID BY

employers and other parties

liable to pay them

133,510

AMOUNT OF UNEMPLOYMENT INSURANCE

CONTRIBUTIONS COLLECTED

CUSTOMER SATISFACTION

(CSAT)

77%

CUSTOMER CONTACTS FOR UNEMPLOYMENT

INSURANCE CONTRIBUTIONS (PCS)

95,641

12,033

Phone calls

6,106

Calculators

were used

21,632

Emails

21,208

Logins to

online service

4,289

Messages in

online service

EUR 2,923 million

NUMBER OF UNEMPLOYMENT INSURANCE

DECISIONS

520,880 pcs

were automated

decisions

TRAINING COMPENSATIONS WERE

REFUNDED TO

616 employers

And they

totalled

EUR 10 million

NUMBER OF CASES FOR SUPERVISION

Decisions based on

supervision

1,234 pcs

894 pcs

of which

99%

million million

EUR

were paid by employees

of the total

times*

Website visits*

All figures are from the period 1 January – 31 December 2023. *Use of calculators and website visits are estimates from the same time period.

Unemployment insurance contributions

25Report of the Board of Directors 2023

Adult education benefits

Adulteducationbenefits

Employment Fund grants

and pays adult education

allowances and scholarships for

qualifiedemployeestosupport

professional capabilities as well

ascompetencedevelopment.

Adult education allowance is granted by

Employment Fund to entrepreneurs and

employees for full-time or part-time train-

ing.Scholarshipsforqualifiedemployees

are granted to persons that have received

vocationaluppersecondarylevelqualifica-

tions, completed further vocational educa-

tion or received specialist vocational qual-

ifications.Thegrantingofadulteducation

allowancesandscholarshipsforqualified

employees is based on the Act on Adult

EducationBenefits(1276/2000).

Wefinancetheemployees’adulteducation

allowances and the scholarships for qual-

ifiedemployeesfromtheunemployment

insurance contributions that we have col-

lected.Thestateisresponsibleforfinanc-

ing adult education allowances for entre-

preneursandscholarshipsforqualified

employeesworkingforcentralgovernment.

In 2023, we granted a total of EUR 201 (189)

million in adult education allowances and

scholarshipsforqualifiedemployees.The

amountoftheadulteducationbenefits

grantedincreasedby6.4%comparedto

2022.

ADULT EDUCATION ALLOWANCE

TO SUPPORT DEVELOPMENT OF

PROFESSIONAL COMPETENCE

Adult education allowances have been

grantedsince2001.Employeesandentre-

preneurs who have been working for at

least eight years may apply for adult educa-

tionallowance.Theallowanceisintended

for maintaining and developing profes-

sional competence and may be granted for

studies conducted under public oversight

inFinland.Thesestudiesmayleadtoafull

degree, a partial degree or be further or con-

tinuingvocationaltraining.

26Report of the Board of Directors 2023

MORE AND MORE PEOPLE

COMBINE WORK AND STUDIES

Under the current legislation on the adult

education allowance scheme, which en-

tered into force on 1 August 2020, there is

moreroomforflexiblecombinationofwork

andstudiesthaninthepast.Moreand

more allowance recipients work alongside

studies.Atotalof19%(15%)oftherecipients

madeuseofthisoptionin2023.Thus,the

number of allowance recipients combining

workandstudiesisincreasingsteadily.

THE POPULARITY OF ADULT EDUCATION

ALLOWANCE CONTINUED TO INCREASE

WepaidatotalofEUR189.3(177.9)million

in adult education allowances to 32,518

(30,124)persons.Theamountpaidwas

about6.4%higherthanin2022.Ofthere-

cipients, 1,079 received entrepreneurs’ adult

education allowance and 31,439 received

employees’adulteducationallowance.

In recent years, most of the recipients of

adult education allowance have been wom-

enagedunder40.Thegenderdistribution

remained unchanged in 2023: 76% were

womenand24%weremen.

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2019 2020 2021 2022 2023

Recipients, persons

Adult education allowances paid,

EUR million

Number of recipients and

adult education allowances paid

EUR

million

persons

27,066

28,322

30,124

32,518

25,701

175.3

177.9

200

180

160

140

120

100

176.6

186.9

189.3

Adulteducationbenefits

Moreandmoreallowancerecipientsworkalongsidestudies.

27Report of the Board of Directors 2023 Adulteducationbenefits

The age distribution of the recipients also

remainedunchanged.Thebreakdownof

the age groups (from the largest to the

smallest) was as follows:

• 30–34,26.7%

• 35–39,24.6%

• 40–44,18.6%

• 45–49,12.8%

• 50–54,6.8%

• 25–29,5.6%

• over55,4.9%

In 2023, about 47% (45%) of the recipients

studied in universities of applied sciences,

23% (26%) in vocational institutions, 27%

(26%) in universities and 3% (3%) in other

educationinstitutions.

24%

76%

Recipients of adult education allowance by gender in 2023

Men

Women

26.7%

18.6%

Recipients of adult education allowance by age in 2023

–

34 years

40–44 years

24.6%

–

39 years

5.6%

–

29 years

12.8%

45–49 years

6.8%

50–54 years

4.9%

55 and over

28Report of the Board of Directors 2023 Adulteducationbenefits

Themajorityoftherecipients(82.8%)used

the adult education allowance for educa-

tionleadingtoadegree.Atotalof13.7%of

the recipients used the allowance for stud-

ies leading to a partial degree or further or

continuingvocationaltraining,and3.5%

useditforothertraining.

Themostpopularfieldsstudiedbythere-

cipients were the social, health and sports

sector33.2%(33.0%)andsocialsciences,

businessandadministration19.0%(18.5%).

They were followed by technology and

transport,16.0%(15.6%)andhumanitiesand

education14.0%(14.4%).

MORE THAN A THIRD OF ALL APPLICANTS

FOR ADULT EDUCATION ALLOWANCES

WORK IN PUBLIC ADMINISTRATION

In terms of employment, persons work-

ing in public administration and national

defence were the largest single group using

theadulteducationallowance.Theyac-

countedfor31.1%(27.2%)ofallrecipients.

Fields where recipients study

2019

2020

2021

2022

2023

Social welfare,

healthcare

and sports

Social

sciences,

business and

administration

Technology

and transport

Humanities

and education

Culture

Natural

resources and

environment

Natural

sciences

Tourism,

hospitality

and business

Other

education

General

education

29Report of the Board of Directors 2023 Adulteducationbenefits

The proportion of applicants working in

thesesectorshasincreasedby17.9%over

thepastfiveyears.Personsworkingin

healthcareandsocialservices(17.4%)and

wholesale and retail trade (11%) were the

next largest group of recipients in terms

ofemployment.Thenumberofrecipients

working in healthcare and social services

hasdecreasedby8.4%overthepastfive

years.Thedecreaseinpartlyexplainedby

statistical change because in the statistics,

the wellbeing services counties are entered

under public administration and national

defence.Therehasbeenasteadydecline

in the proportion of persons working in the

education sector: in 2023, they accounted

for3.5%ofallapplicants(comparedto9.7%

fiveyearsago).

Sectors where recipients work

Public

administration,

national defence

and mandatory

social insurance

Healthcare

and social

services

Wholesale and

retail, motor

vehicle and

motorcycle

repair

Industry

Professional,

scientiﬁc and

technical

activities

Administration

and support

services

Transportation

and storage

Education

Other

2019

2020

2021

2022

2023

30Report of the Board of Directors 2023 Adulteducationbenefits

ANNOUNCEMENT THAT THE ADULT

EDUCATION ALLOWANCE SCHEME WOULD

BE ABOLISHED PROMPTED THE FUND

TO START A MAJOR CHANGE PROJECT

According to the Programme of Prime Min-

ister Petteri Orpo’s Government published

in June 2023, the adult education allowance

scheme would be abolished from 1 August

2024.InAugust,theMinistryofSocialAf-

fairsandHealthsetupalegislativeproject

topreparefortheabolition.Abolishingthe

scholarshipschemeforqualifiedemploy-

eeswasalsoincludedintheproject.The

Government proposal for abolishing the

adulteducationbenefitswascirculatedfor

comments between 12 December 2023 and

5January2024.TheGovernmentbillwas

submitted to Parliament on 15 February

2024.

The announcement that the adult educa-

tionbenefitswouldbeabolishedprompted

thebenefitserviceandEmploymentFund

to start a major change project, which will

progress in accordance with the abolition

timetableproposedbytheministry.

THE ANNOUNCEMENT THAT ADULT

EDUCATION BENEFITS WOULD BE

ABOLISHED LED TO RECORD NUMBER

OF APPLICATIONS DURING THE

SECOND HALF OF THE YEAR

The application procedure for employee’s

adult education allowance is a two-step

process.Basedontheinitialapplication,

the applicant receives eligibility for adult

education allowance for the period speci-

fiedintheapplication.Afterthis,theappli-

cant can apply for an allowance payment

retrospectively for each month on a sep-

aratepaymentapplication.Theapplicant

can apply for allowance extension by sub-

mittinganewapplicationforeligibility.

In 2023, the number of applications was

againatrecordlevels.Thepublicationof

the Government Programme had an impact

on the number of applications during the

secondhalfoftheyear.In2023,wereceived

41,096 (33,615) initial and extension ap-

plications and 144,608 (133,689) payment

applications.Asin2022,thelargestnum-

ber of initial and extension applications

was received in August (6,275, compared to

3,612 in August 2022), which has been one

of the busiest periods for such applications

formanyyears.November,with16,389

(14,874) applications, and December, with

16,982 (15,270) applications, were the busi-

estmonthsforpaymentapplications.The

number of applications received in Novem-

ber and December 2023 were the highest

everinthehistoryofEmploymentFund.

Despite the larger number of applications,

we were able to shorten the processing

times.In2023,theaverageprocessingtime

for initial and extension applications was

13.8(17.1)daysandforpaymentapplica-

tions0.5(0.8)days.

31Report of the Board of Directors 2023 Adulteducationbenefits

AUTOMATION OF THE EXTENSION

APPLICATION PROCESS INCREASED

THE AUTOMATION LEVEL

Most of the applications for the payment

ofadulteducationbenefits(about80%)are

submittedtoourbenefitserviceinthefirst

week of the month, which puts pressure

onourresources.Toensureourservice

capacity, we have developed the automated

applicationprocessinginrecentyears.In

2023, automated payment decisions already

accountedfor83.5%(78%)ofallpayment

decisions.Weincreasedtheautomation

level by introducing automated process-

ingofextensionapplications.Forthefirst

time, we implemented the legislation on

automated decision-making that entered

intoforceon1May2023.In2023,atotalof

20.1%oftheextensionapplicationswere

processedautomatically.Whenthisfigure

is examined, it should be noted that the au-

tomation solution was put into production

useinJune.

In 2023, we achieved further progress in the

automation in scholarship processing, and

40.6%oftheapplicationsforthesebenefits

wereprocessedautomatically.

Applications for adult education allowances

5,000

10,000

15,000

20,000

25,000

applications

2022

2023

January February March

April

May June July August September

October

November

December

32Report of the Board of Directors 2023 Adulteducationbenefits

SCHOLARSHIPS FOR QUALIFIED

EMPLOYEES ON THE BASIS OF A

VOCATIONAL QUALIFICATION

Scholarshipsforqualifiedemployeeswere

introducedin1996.Apersonresidingin

Finland is eligible for the scholarship if

they have completed a vocational upper

secondaryqualification,afurthervocation-

alqualificationoraspecialistvocational

qualification,areunder68yearsofage,and

havebeenworkingforatleastfiveyears

bythedatetheycompletethenewqualifi-

cation.Thescholarshipforqualifiedem-

ployees is a tax-exempt lump sum payment

ofEUR414(qualificationsreceivedafter1

January2022).

POPULARITY OF THE SCHOLARSHIP

INCREASED SLIGHTLY

Wegrantedscholarshipsforqualifiedem-

ployeesto28,485(27,755)personsin2023.

WepaidatotalofEUR11.8(11.5)millionin

scholarships.

The application for the scholarship can be

submitted after graduation and therefore

oftenattheendofthesemester.In2023,

the highest number of applications was

received in June (5,715), December (3,882),

andMay(3,699).Thenumberofapplica-

tions received during these three months

accounted for 41% of the total number of

applicationsreceivedduringtheyear.We

were able to shorten the process times from

the previous year by using automation in

theprocessingofapplications.Theaverage

processing time for scholarship applica-

tions was 7 days, compared to 10 days in

2022.

A total of 43% of the scholarships were

granted on the basis of a further vocational

qualification,33%onthebasisofasecond-

aryvocationalqualification,and25%onthe

basisofaspecialistvocationalqualifica-

tion.Asinpreviousyears,in2023,themost

commonqualificationscompletedbyschol-

arship recipients were the further vocation-

alqualificationinsupervisorywork10.1%

(9.1%),vocationaluppersecondaryquali-

ficationinsocialwelfareandhealthcare

9.6%(9.1%),andaspecialistqualificationin

businessmanagementandleadership7.4%

(7.7%).Asubstantialmajority(64%)ofthe

scholarshiprecipientswerewomen.

Approvals and scholarships paid

to qualiﬁed employees

EUR

million

5,000

10,000

15,000

20,000

25,000

30,000

Approvals

2019 2020 2021 2022 2023

Approvals

Scholarships paid, EUR million

26,187

26,511

26,257

27,678

29,124

10.5

10.6

10.4

11.5

11.8

33Report of the Board of Directors 2023 Adulteducationbenefits

APPEALS AND RECOVERY OF BENEFITS

PAID WITHOUT JUSTIFICATION

Applicantswhoarenotsatisfiedwiththe

outcome of their application for scholar-

shipsforqualifiedemployeesoradultedu-

cation allowances have the right to appeal

thedecision.Thefirstappellatebodyisthe

SocialSecurityAppealBoard.Thesecond

andfinalappellatebodyistheInsurance

Court.In2023,theAppealBoardreceived

248(288)complaints.TheInsuranceCourt

received30(17)complaints.Thecomplaints

mainly concerned the recovery of bene-

fitsortherevisionofbenefits,takinginto

account additional income based on their

timeofpayment.

Ifabenefithasbeenpaidwithoutjustifica-

tion or the amount paid out was too high,

the excess must be recovered from the

recipient.Atotalof1,318(1,198)recovery

decisionsweremade.

THANKS TO CONTINUOUS

IMPROVEMENTS, CUSTOMER

SATISFACTION REACHED RECORD LEVELS

In spring 2023, we continued the custom-

er-orienteddevelopmentofourbenefit

servicesonthebasisofcustomerfeedback.

Our aim was to speed up processing times

andstreamlinetheservices.Thefocusin

the development work was on the online

service and increasing automation in ap-

plicationprocessing.Inservices,themost

important improvements were achieved in

thebenefitapplicationprocess,asaresult

of which the customer satisfaction score

(CSAT) for online service again reached

anewlevel(85%).Withthedevelopment

ofautomation,overallbenefitprocessing

automation level exceeded the 70% limit for

thefirsttimeinthehistoryofthebenefit

service.

During the spring, we conducted an exten-

sive survey to examine the reasons why our

customers apply for adult education allow-

ances and the perceived impact of the adult

educationallowance.Nearly5,000custom-

erstookpartinthesurvey.Thefindings

could provide several inputs for developing

thebenefitanditsimpact.

After the publication of the Government

Programme, we shifted the development

focus to more relevant matters, considering

theabolitionoftheallowancescheme.

34Report of the Board of Directors 2023 Adulteducationbenefits

CUSTOMER CONTACTS FOR ADULT

EDUCATION ALLOWANCE (PCS)

32,518

persons of whom

96.7% were employees

and 3.3% entrepreneurs

ADULT EDUCATION ALLOWANCES

WERE GRANTED TO

NUMBER OF ADULT EDUCATION ALLOWANCE DECISIONS

FOR EMPLOYEES

41,048 pcs

Allowance right decisions

144,659 pcs

Payment decisions

84%

of all decisions were

automatic decisions

11 days

Average

processing time

0.5 days

Average

processing time

1,415 pcs

15 days

Average

processing time

2,117,196

36,540

278,356

8,076

661,844 62,789

Aiming for efficient digital services and customer satisfaction

CUSTOMER SATISFACTION

(CSAT)

85%

Phone calls

Calculators

were used

Emails

Logins to online

service

Messages in

online service

NUMBER OF ADULT EDUCATION ALLOWANCE DECISIONS

FOR ENTREPRENEURS

10%

of all decisions were

automatic decisions

Website visitors*

times*

All figures are from the period 1 January – 31 December 2023. *Use of calculators and website visits are estimates from the same time period.

35Report of the Board of Directors 2023

Finance

NET POSITION OF THE BUSINESS CYCLE

BUFFER NOW SIGNIFICANTLY STRONGER

Under section 3 of the Act on the Financing

ofUnemploymentBenefits,Employment

Fund maintains a business cycle buffer to

ensure liquidity and balance out changes in

unemployment insurance contributions

duetoforeseeableeconomicfluctuationsin

thenationaleconomy.Thebusinesscycle

buffer accrues on the basis of the difference

between Employment Fund’s assets and

liabilities.Whentheunemploymentinsur-

ance contributions are set, the forecast for

the maximum amount of assets or liabili-

ties in the buffer may not exceed liabilities

corresponding to an unemployment rate of

sixpercentagepoints.Whenthedecision

on the level of unemployment insurance

contributions is made, the forecast for the

business cycle buffer may by law exceed

the maximum amount of assets over two

years during a three-year review period in

ordertoensureasteadypaymenttrend.In

that case, however, unemployment insur-

ance contributions may not be set higher

thaninthepreviousyear.Themaximum

amount of the business cycle buffer is

calculatedonthebasisofthefiguresinthe

annualfinancialstatements.

The maximum value of the buffer is cal-

culated by dividing the annual expenses

for which Employment Fund is liable (EUR

2,233 million in 2023) by the average unem-

ploymentratefortheyear(7.2%),andmul-

tiplyingtheresultbysix.Themaximum

EUR

million

1,868 1,861

-2,062 -2,078

-2,220

-2,500

-2,000

-1,500

-1,000

-500

500

1,000

1,500

2,000

2,500

2019 2020 2021 2022 2023

Development of the business cycle buffer

Net position Maximum amount Minimum amount

1,668

1,045

633

1,258

2,021

2,062

2,078

2,220

-1,868

-1,861

36Report of the Board of Directors 2023 Finance

amount of the business cycle buffer al-

lowed under the Act on the Financing of

UnemploymentBenefitswasEUR1,861

(1,868)millionin2023.

In our half-year report, we estimated that

the change in Employment Fund’s net

position would be positive to the amount of

about EUR 780 million in 2023, and positive

to the amount of about EUR 2,040 million at

theendof2023.ThechangeinEmployment

Fund’s net position was EUR 763 (625) mil-

lionin2023.EmploymentFund’snetposi-

tion was EUR 2,021 (1,258) million positive

attheendof2023.

According to the budget for 2024, which we

submitted to the Ministry of Social Affairs

andHealthinAugust2023,thechangein

Employment Fund’s net position in 2024

would be negative to the amount of EUR

338 million and its net position would be

positive to the amount of EUR 1,701 million

on31December2024.Whenpreparingour

financialstatementsfor2023,weestimated

that the change in Employment Fund’s net

position would be negative to the amount

of about EUR 570 million in 2024, which

would mean a positive net position of about

EUR1,450millionattheendof2024.

EUR

million

-800

-600

-400

-200

200

400

600

800

1,000

2019 2020 2021 2022 2023

Change in net position

694

-623

-412

625

763

37Report of the Board of Directors 2023 Finance

LIQUIDITY AND DEBT FINANCING

Under the investment principles approved

by Employment Fund’s Supervisory Board,

infixed-incomeinvestmentswithlessthan

one year’s maturity, the Fund must keep

an amount that covers at least one month’s

expenses.In2023,thisamountwasabout

EUR300million.Onaverage,theliquidity

bufferdescribedabovewas2.6timesthe

minimumamountin2023.

For liquidity purposes, the Fund also has

a EUR 300 million commercial paper pro-

gramme(31Dec2022:EUR300million).In

addition, the Fund also has EUR 600 million

in committed revolving credit facilities

(RCF) with four banks (31 Dec 2022: EUR 600

million).Thecommercialpaperprogramme

and the revolving credit facilities remained

unused at the end of 2023 (31 Dec 2022:

commercial papers with a value of EUR 100

millionwereinuse).

At the end of 2023, Employment Fund had

a bond of EUR 600 million issued in 2020,

whichisdueon16June2027.

In 2023, Employment Fund repaid the bond

of EUR 600 million withdrawn in 2020 on

itsduedateinJune2023.Employment

Fund also repaid commercial papers with

avalueofEUR100millionduringthefirst

halfof2023.

The credit rating agency S&P Global Rat-

ings has given Employment Fund a credit

ratingofAA+(stableoutlook)/A-1+.S&P

Global Ratings has given the same rating to

theStateofFinland.

TheFundrepaidloanstotallingEUR700millionasplanned.

38Report of the Board of Directors 2023

Investment activities

Employment Fund carries out

investment activities to the

extent necessary to manage the

timing differences in the cash

flowsgeneratedbyitsincome

and expenses, and for liquidity

managementpurposes.

We manage our investment activities in

accordance with the investment principles

approved by the Fund’s Supervisory Board,

and the investment plan set by the Board of

Directors.EmploymentFund’sinvestment

andfinancialassetstotalledEUR1,869

(1,885)millionattheendof2023.

FINANCIAL OPERATING ENVIRONMENT

The war in Ukraine and geopolitical ten-

sions continued to slow down global eco-

nomicgrowthin2023.TheFinnishecono-

my contracted slightly, but the employment

situationremainedrelativelystablein2023.

Rapidaccelerationofinflationandthe

raising of key interest rates, a measure

takenbycentralbankstocombatinfla-

tion,continueduntillate2023.Thecycleof

raising key interest rates came to an end

in the USA in July, and the European Cen-

tral Bank stopped using this instrument in

October2023.

THE INVESTMENT MARKET

For the most part, the stock market grew

stronglyduring2023.InNorthAmerica,

stock indices increased by about 22% and

inEuropebyabout17%.Theperformanceof

the domestic stock exchange was modest

andtheindexyieldwas-0.5%.

Thereturnsonfixed-incomeinvestments

inEuropeanbondswerehigh.Thiswasdue

to stronger pricing of credit risks and (es-

pecially towards the end of the year) lower

interestonbonds;thisdevelopmentwas

mainly prompted by the statements issued

by central banks and reports on a substan-

tialslowdownofinflationinboththeUSA

andEurope.

39Report of the Board of Directors 2023

Market trends of alternative investments

during the year depended to a great extent

ontheinvestmentcategoryconcerned.For

example, investments in the domestic real

estate sector yielded low returns during

2023, whereas investments in the forest-

ry sector were characterised by strong

returns.

ALLOCATION OF INVESTMENTS

We actively invested our assets in money

market instruments, bonds, equities and

alternativeinvestments.Dependingonthe

asset class, the Fund made direct invest-

mentsorinvesteditsassetsthroughfunds.

We increased the weight of bonds in the

2023investmentplan.InJune2023,we

reduced the weight of money market in-

vestments to facilitate repayment of a bond

of EUR 600 million that we had taken out in

2020.Attheendofthefinancialperiod,EUR

820 (1,098) million of the Fund’s assets were

invested in money market instruments,

EUR 958 (669) million in bonds, EUR 39 (36)

million in equities, and EUR 83 (75) million

inalternativeinvestments.

In 2023, the return on our investments was

4.1%(-2.9%).Thereturnexceededtheexpec-

tationenteredinourinvestmentplan(2.8%)

and was at the level of the reference return

onourinvestmentactivities.

Our investment plan for 2024 was approved

by Employment Fund’s Board of Directors

on28November2023.Onlyminorchanges

weremadetotheweightingoftheplan.

They included a slight increase in the size

of the alternative investment category and

a slight reduction in the weight of short-

termfixed-incomeinvestments.

Sustainability issues are also a considera-

tion when we make our investment deci-

sions.SustainabilityintheFund’sinvest-

ment activities is described in more detail

inthesectiononsustainabilityonpage41.

1.9

0.8

0.1

-4

-3

-2

-1

2019 2020 2021 2022 2023

Return on investments

Return on investments Reference return

0.7

0.5

-0.7

-2.9 -2.8

4.1 4.1

43%

50%

Asset allocation

Money market

Bonds

Alternative

investments

2%Equities

Investment activities

40Report of the Board of Directors 2023 Investment activities

0 20 40 60 80 100 120 140 160 180

EUR million

Largest investments

Finnish Government bond

German Government bond

Dutch Government bond

OP Corporate Bank bond

SEB bond

Svenska Handelsbanken certiﬁcate of deposit

North-Rhine Westphalia Bond

SEB Euro Short Rate Fund IC ﬁxed-income fund

OP Euro II A ﬁxed-income fund

Nordea Mortgage Bank bond

EUR 157.0 million

EUR 88.5 million

EUR 66.4 million

EUR 51.5 million

EUR 48.7 million

EUR 39.6 million

EUR 32.7 million

EUR 32.0 million

EUR 30.3 million

EUR 30.1 million

41Report of the Board of Directors 2023 Sustainability

Sustainability

We promote sustainable

development and sustainability

in the areas where we can

maximiseourinfluence

throughourcoreactivities.

In our role as an executor of social

security, we put great emphasis on social

responsibilitythemes.In2022and2023,

we prepared a sustainability concept for

the Fund to support the achievement of

the sustainable development goals set by

theUNinits2030Agenda.Inadditionto

our sustainability concept, sustainability is

alsoreflectedinourinvestmentactivities,

acquisitionofdebtfinancingandour

equalityanddiversitywork.

During 2023, we also made use of a variety

of different networks to develop our sus-

tainabilitycompetence.Wejoinedthecor-

porate responsibility network FIBS, which

organises events on topical sustainability

themes and provides news and information

servicesonrelatedtopics.Wealsotook

part in the events organised by the sustain-

ability network maintained by the State

Treasury, in which public administration

organisations share information on such

matters as best practices of sustainability

andsustainabilityreporting.

42Report of the Board of Directors 2023 Sustainability

WE DEFINED OUR SUSTAINABILITY GOALS

In 2022 and 2023, we carried out a materiality analysis to create the basis for the Fund’s

ownsustainabilityconcept.Thepurposeoftheanalysishasbeentoidentifythesustaina-

bledevelopmentgoalsoftheUNonwhichwecanexertmaximumpositiveinfluencewith

ourowncoreactivities.Weselectedthefollowingkeygoalsofthe2030Agendaassuch

objectives:

• Qualityeducation

• Decent work and economic growth

• Peace, justice and strong institutions

ThesekeygoalsaredirectlylinkedtotheFund’scoretasks,suchasthefinancingofun-

employmentsecurityandadulteducationbenefits.TheworkontheFund’sconcretesus-

tainability measures and indicators is still under way and the work will continue during

2024.Ouraimistobuildafoundationforsystematicsustainabilityworksothatwecan

reportonoursustainabilityactivitiesonaregularbasisinthecomingyears.

43Report of the Board of Directors 2023 Sustainability

FRAMEWORK FOR SOCIAL FUNDING

The Fund prepared a framework for social

fundinginspring2023.Theframework

was prepared in accordance with the social

bond principles of the International Capi-

tal Market Association (ICMA) updated in

2021 and the social loan principles of the

European Loan Market Association (LMA)

updatedin2023.Withintheframework,the

Fund is able to acquire different types of

debtfinancingspecificallypromotingsocial

improvements.

It also enables us to establish a close link

betweenourdebtfinancingandpositiveso-

cialimpacts.Usingtheframework,wecan

alsopromote‘Qualityeducation’and‘De-

cent work and economic growth’, two of the

UN sustainable development goals selected

bytheFundforitssustainabilitywork.The

financingtakenoutinthismannerwill

be used to cover the expenses that meet

the eligibility criteria (provide security for

changesinworkinglife).Theyincludethe

fundingofunemploymentbenefitsandthe

adult education allowance scheme, which

supports the maintenance and develop-

mentofvocationalcompetence.Attheend

of 2023, Employment Fund did not have any

debtfinancingtowhichthesocialfunding

frameworkwouldhavebeenapplied.

EQUALITY AND DIVERSITY WORK

In spring 2023, the Fund established a di-

versity working group the aim of which is

to identify and discuss issues concerning

the diversity of the work community and

definethepracticaldevelopmentmeasures

that may be needed in our work communi-

ty.Thetaskoftheworkinggroupisalsoto

promote the experience of all our employ-

ees of an open and equal work communi-

ty.Withourequalityanddiversitywork,

we can contribute to the achievement of

the objective ‘Decent work and economic

growth’, one of the key goals of the UN 2030

Agenda that we have selected for our sus-

tainabilitywork.

During 2023, we assessed the current state

of the Fund using the diversity manage-

ment self-assessment tool developed by

theFIBScorporatesustainabilitynetwork.

Intheassessment,weidentifiedanumber

ofpreliminarydevelopmentpriorities.The

aim of the diversity working group is to

prepare an updated non-discrimination,

equality and diversity plan for the Fund

during2024.

44Report of the Board of Directors 2023 Responsibility

SUSTAINABLE INVESTING

Sustainability in our investment activ-

ities means that we take responsibility

and sustainability matters into account in

ourinvestmentdecisions.Whenwemake

investment decisions, we take environ-

mental, social and governance (ESG) factors

intoconsiderationinadditiontofinancial

indicators.Withtheexceptionofindex

investments, we integrate ESG factors into

allourinvestmentsinsofarasispossible.

We do our part to ensure that ESG factors

are taken into consideration by commis-

sioning an external party to review our

investments two times per year and report

anydeviations.

We exclude companies whose operating

methods are considered irresponsible with

regard to factors such as corruption, child

labour, employees’ rights and human rights

fromourlistofpotentialinvestments.We

also invest in companies that comply with

theUNGlobalCompactwhereverpossible.

Numerical methods of assessment are used

to monitor and analyse the sustainability

ofEmploymentFund’sinvestments.The

goal is to provide a picture of the Fund’s

sustainabilityprofileandmapitsdevelop-

ment as comprehensively and diversely as

possible.Similarmetricshavebeenused

formonitoringsince2019.Thesustainabili-

ty analysis includes a review of operational

sustainability metrics for the investment

items and the companies behind them,

such as commitment to equality, good gov-

ernance, and the development of variables

usedtomeasureenvironmentalimpact.

The assessment is based on SFDR and Mi-

FIDIIregulationandEUtaxonomy.Accord-

ing to the latest sustainability assessment,

our investments performed well against the

ESGcriteria.

45Report of the Board of Directors 2023 Responsibility

The ESG analysis of Employment Fund’s

investments covers 54% of the Fund’s

investmentassets.Theanalysedassets

do not include such items as investments

in government bonds, which account for

a substantial proportion of the Fund’s

investmentassets.Accordingtoananal-

ysis assessing the sustainability of our

investments in December 2023 conducted

by an asset management institution, the

environmental indicators of our invest-

ments (carbon footprint, carbon intensity,

weighted carbon intensity and water use)

have increased compared to the analysis

conductedinJune2023.Theincreasehas

been driven by a growing proportion of the

bonds issued by energy companies and for-

estindustrycompaniesinourinvestments.

However,thecarbonfootprintofourinvest-

mentsstillremainssignificantlylowerthan

thebenchmarkindex.

Some 79% of our liquid fund investments

are investments promoting sustainability

factors (in funds meeting the requirements

of Article 8 of SFDR), and 16% are invest-

ments meeting the requirements of Article

9 of SFDR (in funds for sustainable invest-

ments).Wehavegiven80%ofourinvest-

ments ambitious goals in climate work

andemissionreductions.Some77%ofour

investments are estimated to have a posi-

tive impact on the sustainable development

goalsoftheUN.

The social factor indices relevant to our

investments (gender equality, independent

governance, equal pay and higher employ-

ment) showed a negative trend compared to

the year 2019 when the monitoring started,

but they are nevertheless in line with the

benchmarkindex.Inparticular,theequal

payindexissignificantlyabovethebench-

markindex.

There are no non-compliant companies (as

classifiedbyISS)inthedirectinvestments

madebyEmploymentFund.Aspartof

indexfundinvestments,0.1%oftheFund’s

investments have been directed at such

companies.

46Report of the Board of Directors 2023

Risk management

Risk management is part of

Employment Fund’s internal

control.Itsaimistoensurerisk

awareness in decision-making

and to support the Fund in the

achievementofitsobjectives.

Risk management produces

high-quality information

on risks and threats facing

the Fund and provides

recommendations for measures

topreventthem.

WE USE EXTENSIVE RISK

MANAGEMENT TO ENSURE THE

CONTINUITY OF OUR ACTIVITIES

We monitor and manage such risks as stra-

tegic and operational risks, regulatory, eco-

nomicandfinancialrisksaswellasrisks

arisingfromouroperatingenvironment.

Identifying strategic-level risks and man-

aging them on a systemic basis help the

Fund to achieve its goals within the frame-

workofaspecificriskappetitelevel.In

2024, we took further measures to develop

ourstrategic-levelriskmanagement.

The purpose of operational risk manage-

ment is to safeguard the continuity of our

key functions and statutory activities and

to ensure that the Fund can also operate

duringemergencies.Overthepastfew

years we have focused on building digi-

talisation to improve our services and to

boosttheefficiencyofouroperations.By

increasing automation, we have been able

to reduce operational risks and to speed up

implementationprocesses.Providingthe

personnel with training and instructions

on information security matters are also an

important part of the prevention of cyber

risks.

47Report of the Board of Directors 2023 Risk management

By managing regulatory risks, we can en-

sure that Employment Fund acts in compli-

ance with the law and other requirements

andinanethicalandresponsiblemanner.

Active monitoring of legislative changes is

ankeypartofthisprocess.Wealsoactive-

ly monitor developments in information

securitylegislation.Wedevelopeddata

protectionprocesses,especiallyinthefield

of impact assessment, and provided our

personnel with training in personal data

processing.

Tomanagefinancialrisksarisingfrom

changes in the operating environment, we

rely on such means as diverse forecast-

ing methods and timely adjustments of

unemploymentinsurancecontributions.

To safeguard our liquidity, we make low-

risk investments and strive to secure good

borrowingpossibilities.EmploymentFund

also has a statutory business cycle buffer

to reduce the need for changes in the level

of unemployment insurance contributions

duetocyclicalfluctuations.Financialrisk

management in Employment Fund has

reliedonthesameprinciplesasbefore.

Employment Fund has an anonymous

channel for reporting misconduct where

mattersspecifiedintheWhistleblowerAct

and violations of ethical guidelines can be

reported.

48Report of the Board of Directors 2023

At the end of 2023, the Fund had 175 (167)

employees.Whenmeasuredinperson-

years, the number of personnel was

159(147)attheendof2023.

We paid EUR 9,842 thousand in wages, in-

cludingEUR59thousandinfringebenefits.

Our pay system is based on the complexity

of work, and we also use a bonus system

supporting the achievement of our strate-

gicobjectives.

Men accounted for 56 (54) and women

for119(113)ofthepersonnel.Theaverage

employeeagewas41.5(41)years,andthe

average duration of employment in Em-

ploymentFundwas6.3years.Voluntary

staffturnoverwas8.53%andsickleave

percentage3.23%.

100

120

140

160

180

200

persons

30 Jun

2022

31 Dec

2022

30 Jun

2023

Number of personnel

2022—2023

174 175

167

31 Dec

2023

186

persons

Age and gender breakdown 2023

20—29

years

30—39

years

40—49

years

50—59

years

60—65

years

Women Men

Personnel

49Report of the Board of Directors 2023

WE ANALYSED AND DEVELOPED

EMPLOYEE EXPERIENCE

Employee wellbeing is a key priority in the

Fund, and it is constantly monitored and

developed.Inspring2023,weconductedan

extensive personnel survey to examine the

employeeexperienceofourpersonnel.We

also carried out two pulse surveys to moni-

torprogressinmattersidentifiedasdevel-

opmentpriorities.Attheendoftheyear,we

also carried out an Aisti wellbeing survey

to analyse the resource and workload fac-

torsinourworkcommunityinmoredetail.

The results showed that our staff members

appreciatetheFund’sflexiblehybridwork

model, opportunities for combining work

with other aspects of life and the friendly

andencouragingworkatmosphere.The

work in the Fund is considered interest-

ing and meaningful, and the view is that

the values of the Fund are also applied in

practice.

Personnel

Our People Power Index decreased slight-

ly,from68.3to66.5.Basedontheperson-

nelsurvey,weidentifiedclarityofdeci-

sion-making and availability of information

needed in the work as key development

priorities.Basedonthefollow-upsurveys,

we achieved improvements in both areas

during2023.Wehavealsodeterminedthat

improvements are needed in workload

managementandcognitiveergonomics.

In the spring personnel survey, we also ex-

amined the experiences of diversity, equity

andinclusionamongFundemployees.The

findingsindicatethattheoverallsituation

is good, but at the same time, we also iden-

tifiedtheneedformoresystematicman-

agementoftheabove-mentionedthemes.

Accordingly, in early summer, the Fund set

up a diversity working group, which will

participate in the development work and

promote diversity, equity and inclusion in

ourworkcommunity.

50Report of the Board of Directors 2023 Personnel

WE TRAINED OUR PERSONNEL

AND STRENGTHENED OUR

TECHNOLOGICAL COMPETENCE

The work to update and develop our organ-

isationcontinuedduring2023.Themost

extensive development measures were

carried out in the Technology and Develop-

ment service area, which we are strength-

ening with new roles and expertise so that

it can better meet our current and future

needs.

In 2023, the focus in the work to develop the

competence of the Fund’s personnel was

on organizational communication, service

design, coaching, accessibility and system

development.AllFundemployeeshave

access to the continuously expanding con-

tents of our internal learning environment

and the training provided by our external

partnertoimprovedigitalandotherskills.

The average number of training hours

duringtheyearwas14.09(9.93)perperson.

The increase in the time invested in train-

ing compared to 2022 supports our goal of

establishing a closer link between compe-

tence development and the work of each

employee.

SUPPORT IN CHANGES

The uncertainties arising from the discon-

tinuation of the adult education allowance

schemehavebeenreflectedintheemploy-

eeexperience.Thisisbecauseifimple-

mented, the legislative change will mean

that the tasks of the personnel processing

adulteducationbenefitswillbereduced

andultimatelyabolished.Inautumn,we

provided supervisors with coaching for

supervisoryworkinchangesituations.All

employees were provided with support in

the handling of the emotions arising from

the change situation and in ensuring that

the resources and the motivation are not

affectedbythechange.Inachallenging

situation, Fund employees have shown

excellent capacity for change and they are

prepared for a smooth implementation of

thelegislativechange.

Theworktoupdateanddevelopourorganisationcontinuedduring2023.

51Report of the Board of Directors 2023

Events after the financial period

Eventsafterthefinancialperiod

NosignificantchangesoccurredinEmploymentFund’sfinancialpositionaftertheendofthereviewperiod.

Helsinki27February2024

Employment Fund

Board of Directors

52Report of the Board of Directors 2023

Corporate governance

The corporate governance statement of

Employment Fund for 2023 has been pre-

pared in accordance with the Securities

Market Act and the recommendation on re-

porting contained in the Finnish Corporate

Governance Code for Listed Companies,

whichtookeffecton1January2020.

COMPLIANCE WITH THE FINNISH

CORPORATE GOVERNANCE CODE

2020 AND DEVIATIONS FROM

THE RECOMMENDATIONS

Employment Fund is an independent stat-

utory agency supervised by the Financial

SupervisoryAuthority.EmploymentFund

has issued bonds quoted on Nasdaq OMX

HelsinkiLtd,someofwhichwereduefor

repayment in 2023, while the remainder

willmaturein2027.

Employment Fund has a commercial pa-

per programme of EUR 300 million (31 Dec

2022:EUR300million).Thecommercial

paper programme remained unused at the

endof2023.

Where applicable, Employment Fund con-

ducts its operations in compliance with the

Finnish Corporate Governance Code, which

is publicly available on the Securities Mar-

ketAssociation’swebsite(www.cgfinland.

fi).

The operations of Employment Fund and

the responsibilities of its organs are based

on the Act on the Financing of Unem-

ploymentBenefits(555/1998),Government

Decree on the Financing of Unemployment

Benefits(1227/2014)andtheDecreeonthe

Rules of Procedure of Employment Fund

(862/1998).

Due to Employment Fund’s form of activity

and background, its operations differ from

the Finnish Corporate Governance Code on

the following recommendations:

• Recommendations 1, 2, 3 and 4:

Employment Fund is not a limited

liability company and its most senior

decision-making body is not a general

meeting or similar organ as this task

is carried out by the Supervisory

Board appointed by the Government,

in accordance with the Decree on the

Rules of Procedure of Employment

Fund(862/1998).TheDecreecontains

provisions on matters to be decided

in the meetings of the Supervisory

Board and the related procedures as

wellasthenoticeofthemeeting.For

this reason, the recommendations

concerning the general meeting,

notice of the general meeting,

proposals for decisions, initiatives

of the shareholders, attendance at

the general meeting and documents

discussed at the general meeting are

not directly applicable to the operations

ofEmploymentFund.

• Recommendations 5, 6, 7, 8 and 9:

Employment Fund’s Supervisory

Board elects the members of the Board

of Directors in accordance with the

principles set out in the Decree on the

Rules of Procedure of Employment

Fund(862/1998).UndertheDecree,

the Supervisory Board approves the

appointment of the members, chair

53Report of the Board of Directors 2023

and vice chair of the Board of Directors

forthefollowingcalendaryear.Seven

of the Board of Directors’ members

represent employer organisations and

sevenareemployeerepresentatives.

For this reason, the recommendations

concerning the election, term of

office,composition,diversityand

independence of the Board members

are not fully applicable to Employment

Fund’soperations.

• Recommendations 10 and 19:

Employment Fund’s Supervisory

Board elects the members of the Board

of Directors in accordance with the

principles set out in the Decree on the

Rules of Procedure of Employment

Fund(862/1998).EmploymentFund

has no shareholders or similar owners,

and thus there is no evaluation of

whether the Board of Directors or

management is independent of

significantshareholders.Likewise,

the recommendation concerning the

shareholders’ nomination committee is

notapplicable.

• Recommendations 16, 17 and 18: The

regulations governing Employment

Fund’s operations do not impose

an obligation to establish special

committees.Therefore,theFunddoes

not have any committees other than an

auditcommittee.AsEmploymentFund

is not a limited liability company, there

is no evaluation of whether the audit

committee members are independent of

significantshareholders.

• Recommendation 21: Under the

Decree on the Rules of Procedure of

Employment Fund, the Supervisory

Board elects the members and chair

oftheBoardofDirectors.Thechair

is elected from among the Board of

Directors members (in alternating years

from among the representatives of the

employers or employees) and thus the

recommendation on the restriction

concerning the Managing Director is

notapplicable.

• Recommendation 22: The Ministry of

SocialAffairsandHealthdecideson

the remuneration for meetings for the

Supervisory Board and the principles of

compensationfortravellingexpenses.

The Supervisory Board decides on the

remunerationoftheBoardofDirectors.

The Board of Directors decides on

the remuneration and the terms and

conditions of the service contract of

the Managing Director as well as the

principles of remuneration for other

managementstaff.

• Recommendation 23: Employment

Fund has no shareholders or similar

owners, and thus the recommendations

concerning shares and share-based

remuneration for the members of the

BoardofDirectorsarenotapplicable.

• Recommendation 27: Employment

Fund is not a limited liability company

and thus the regulation on related-

party transactions is not applicable

to Employment Fund’s operations

within the meaning of the Finnish

CorporateGovernanceCode.However,

Employment Fund complies with IFRS

standards and monitors related-party

transactionsasdescribedbelow.

Corporate governance

54Report of the Board of Directors 2023

SUPERVISORY BOARD

Under the Decree on the Rules of Procedure

of Employment Fund (862/1998), the Super-

visory Board, which has between 10 and

18 members, is Employment Fund’s most

seniordecision-makingbody.

Halfofthemembersrepresentemployers

andtheotherhalfrepresentemployees.

The term of the members of Employment

Fund’s Supervisory Board is three calendar

years.

On 22 October 2020, on the proposal of

theMinistryofSocialAffairsandHealth,

the Government appointed the members

of Employment Fund’s Supervisory Board

for the term 1 January 2021–31 December

2023.Atotalof18memberswereappointed

totheSupervisoryBoard.Sixofthemem-

bers were appointed on the proposal of the

Confederation of Finnish Industries (EK),

three on the proposal of the Local Govern-

ment and County Employers (KT), three on

the proposal of the Central Organisation

of Finnish Trade Unions (SAK), three on

the proposal of the Finnish Confederation

of Professionals (STTK) and three on the

proposal of the Confederation of Unions

for Professional and Managerial Staff in

Finland(Akava).In2022,theGovernment

appointed two new members to the Super-

visory Board for the rest of the current term

(until31December2023).Inautumn2023,

the Government appointed the members

of Employment Fund’s Supervisory Board

for the three-year period 1 January 2024–31

December2026.

The Supervisory Board elects from among

its members a chair and a vice chair for one

calendar year at a time, one of whom is an

employer representative and the other one

anemployeerepresentative.Thechairman-

ship is held in turn by representatives of

employers and employees, alternating an-

nually.In2023,theSupervisoryBoardwas

chairedbyAnnikaRönni-Sällinen.

Corporate governance

55Report of the Board of Directors 2023

Meeting practice and access to information

The ordinary meeting of the Supervisory

Board is held twice a year, in the spring

before the end of May and in the autumn no

laterthaninOctober.Anadditionalmeet-

ing of the Supervisory Board is held when-

ever the chair of the Supervisory Board or

the Board of Directors deems it necessary,

or when at least two members of the Su-

pervisory Board request in writing that an

additional meeting be held for a reason

specifiedintherequest.Thenoticeofthe

meetingmustbedeliveredinaverifiable

manner to the members of the Supervisory

Board no later than eight days before the

meeting.

The meeting of the Supervisory Board

constitutes a quorum when the chair or the

vice chair and at least half of the members

arepresent.Thosepresentmustinclude

both employer and employee represent-

atives.ThedecisionsoftheSupervisory

Boardarebasedonasimplemajority.In

the event of a tie, the decision is based on

the opinion supported by the chair of the

meeting.

In the event of an election in which the

voting ends in a tie, the result is decided

bydrawinglots.Ifthequestionconcernsa

proposal for unemployment insurance con-

tributions and the voting ends in a tie, the

opinion supported by both the chair and

thevicechairbecomesthedecision.

The Supervisory Board elects the chair and

the vice chair of the Supervisory Board for

onecalendaryearatatime.Onemustbe

an employer representative and the other

anemployeerepresentative.Thechair-

manship is held in turn by representatives

of employers and employees, alternating

annually.

TheSupervisoryBoardmettwicein2023.

Corporate governance

56Report of the Board of Directors 2023

The members of the Supervisory Board in 2023 were:

Name

Year of

birth Education Main occupation

Attendance at

meetings of the

Supervisory Board

Annika Rönni-Sällinen,

chair 1976 Master of Laws President, Service Union United (PAM ry) 2/2

Antti Zitting, vice chair 1956 Master of Science (Technology) Board chair, Sacotec Oy 2/2

Riku Aalto 1965 Master of Administrative Sciences President, Industrial Union 2/2

Jari Jokinen 1967 Master of Science (Technology) Executive Director, Tekniikan Akateemisten Liitto (TEK ry) 2/2

Teemu Kokko 1961

Doctor of Science (Business

Administration) President,CEO,Haaga-HeliaUniversityofAppliedSciences 2/2

Antti Korpiniemi 1961

Master of Agriculture and Forestry

Sciences CEO, Berner Ltd 2/2

Tomi Lantto 1970 Master of Economic Sciences CEO, Antell Oy 2/2

Kirsi-Marja Lievonen 1962

Licentiate of Laws trained on the

bench HumanResourcesManager,CityofVantaa 1/2

Petri Lindroos 1965 Master of Education

Director of Negotiations, Trade Union of Education in Finland

(OAJ ry) 2/2

Salla Luomanmäki 1963 Master of Arts Executive Director, Akava Special Branches (Ae ry) 1/2

Jorma Malinen 1959 Automation Designer President, Trade Union Pro 1/2

Matti Mettälä 1963 Master of Laws trained on the bench EVP,KeskoCorporation 2/2

Taina Niiranen 1966 Master of Administrative Sciences HRDirector,PirkanmaaWellbeingServicesCounty 2/2

Olli Nikula 1967 Master of Economic Sciences CEO, Saint-Gobain Finland Ltd 2/2

Silja Paavola 1956 Assistant Nurse Chair, the Finnish Union of Practical Nurses (SuPer ry) 2/2

Juha Rostedt 1963 Trade Technician Vice-chair,LocalGovernmentandCountyEmployers(KT) 2/2

Saila Ruuth 1981 Master of Political Science

VicePresident,TradeUnionforthePublicandWelfare

Sectors(JHLry) 1/2

Millariikka Rytkönen 1975

Midwifery, Bachelor's Degree,

Nursing, Master's Degree

Chair,UnionofHealthandSocialCareProfessionalsin

Finland (Tehy ry) 2/2

Corporate governance

57Report of the Board of Directors 2023 Corporate governance

BOARD OF DIRECTORS

Under the Decree on the Rules of Procedure

of Employment Fund (862/1998), Employ-

ment Fund must have a Board of Directors

composedof14members.Themembersare

nominated by the Supervisory Board and

seven of the members must be representa-

tives of employer organisations and seven

employeerepresentatives.

The Board of Directors must have a chair

and vice chair, one of whom must be an

employer representative and the other one

anemployeerepresentative.Thechair-

manship is held in turn by representatives

of employers and employees, alternating

annually.

The Board of Directors constitutes a quo-

rum when the chair or the vice chair and

atleastsevenothermembersarepresent.

Those present must include both employer

andemployeerepresentatives.Thedeci-

sions of the Board of Directors are based on

asimplemajority.Intheeventofatie,the

decision is based on the opinion supported

bythechairofthemeeting.Ifthequestion

concerns a proposal for unemployment

insurance contributions and the voting

ends in a tie, the opinion supported by both

the chair and the vice chair becomes the

decision.

The Board of Directors is responsible for

Employment Fund’s administration and

theproperorganisationofitsoperations.

The Board of Directors follows the develop-

ment of Employment Fund with the help

of monthly reports and other information

deliveredbythemanagement.Thekey

tasks and operating principles of Employ-

ment Fund’s Board of Directors are set out

in the Decree on the Rules of Procedure of

Employment Fund (862/1998) and in the

Board’swrittenrulesofprocedure.The

Board carries out a self-assessment of its

activitieseachyear.

58Report of the Board of Directors 2023

The members of the Board of Directors in 2023 were:

Name

Year of

birth Education Main occupation

Attendance at

meetings of the

Board of Directors

VesaRantahalvari,chair 1967 Master of Administrative Sciences

Chief Policy Adviser, Confederation of Finnish Industries

(EK) 11/11

Pekka Piispanen, vice chair 1960 Master of Arts

Director, Confederation of Unions for Professional and

Managerial Staff in Finland (Akava ry) 11/11

Tuomas Aarto 1973

Master of Laws trained on the

bench CEO, Management, Service Sector Employers (PALTA ry) 11/11

Jarkko Eloranta 1966 Master of Political Science

President, Central Organisation of Finnish Trade Unions

(SAK ry) 10/11

Minna Etu-Seppälä 1972

Master of Laws trained on the

bench Director, Chemical Industry Federation of Finland (KT ry) 9/11

RiikkaHeikinheimo 1963 Doctor of Philosophy Director, Confederation of Finnish Industries (EK) 11/11

MinnaHelle 1972 Master of Laws Executive Director, Technology Industries of Finland 11/11

Markku Jalonen 1960 Licentiate of Social Sciences

Managing Director, Local Government and County

Employers (KT) 11/11

Patrizio Lainà 1985

Doctor of Political Science, Master

of Economic Sciences

Chief Economist, Finnish Confederation of Professionals

(STTK ry) 11/11

HenrikaNybondas-Kangas 1974

Master of Laws trained on the

bench

Director of Negotiations, Local Government and County

Employers (KT) 11/11

Antti Palola 1959 Sea Captain President, Finnish Confederation of Professionals (STTK ry) 11/11

Saana Siekkinen 1972 Master of Social Sciences

Director, Central Organisation of Finnish Trade Unions

(SAK ry) 10/11

HeikkiTaulu 1973 Master of Social Sciences

Economist, Confederation of Unions for Professional and

Managerial Staff in Finland (Akava ry) 11/11

PirjoVäänänen 1971 Bachelor in Social Services

HeadofSocialAffairs,CentralOrganisationofFinnish

Trade Unions (SAK ry) 10/11

Corporate governance

59Report of the Board of Directors 2023 Corporate governance

Meeting practice and access to information

The chair convenes the meeting of the

BoardofDirectors.Thenoticeconcerning

the meeting of the Board of Directors must

be delivered to all members in good time

before the meeting in order to ensure that

the members of the Board of Directors are

abletoattendthemeeting.TheBoardof

Directors meets 8–12 times each year and,

ifnecessary,moreoften.Ifallthemembers

approve, the meeting of the Board of Direc-

tors may be held as a telephone conference

orviaemailincaseofurgentandspecific

matters.

Chair’s duties

The Supervisory Board elects the chair and

the vice chair of the Board of Directors for

onecalendaryearatatime.In2023,the

BoardofDirectorswaschairedbyVesa

Rantahalvari.

Chair of the Board

• convenes the meetings of the Board of

Directors

• approves the agenda prepared by the

Managing Director for the meetings of

the Board of Directors

• is responsible for ensuring that minutes

are drafted of every meeting of the

Board of Directors

• maintains contacts with the Managing

Director and members of the Board

of Directors between meetings, as

necessary, and is responsible for

ensuring that these rules of procedure

are complied with in the work of the

Board of Directors

• approves the invoices of the Managing

Director.

Operations of the Board of Directors

In2023,theBoardofDirectorsmet11times.

The Board of Directors also held two strat-

egy seminars, for which no remuneration

ispaid.TheBoardofDirectorsassessesits

own activities and operating practices as

well as the activities and operating prac-

ticesoftheauditcommitteeeachyear.In

2023, the assessment was carried out as a

self-assessment and its results were dis-

cussedattheBoardmeetinginDecember.

60Report of the Board of Directors 2023 Corporate governance

AUDIT COMMITTEE

On the basis of the rules applying to Em-

ployment Fund, the Board of Directors

doesnothaveanypermanentcommittees.

However,itcandecidetoestablishwork-

ing groups or committees for the purpose

of assisting the Board of Directors with

the preparation of certain matters falling

within the competence of the Board of Di-

rectors.TheBoardofDirectorshashadan

auditcommitteesince2019.Themembers

of the audit committee are appointed by

the Fund’s Board of Directors from among

itsmembers.Undertheauditcommittee’s

rules of procedure, the committee must

have at least four members, half of whom

represent employees and half represent

employers.

The audit committee assists the Board

ofDirectors.Theauditcommitteehasno

decision-making powers, but it can submit

proposals and reports to the Board of Direc-

torsonthetasksassignedtoit.Theaudit

committee is primarily responsible for pre-

paringmattersrelatedtofinancialreport-

ing, internal control, risk management and

theselectionofauditors.In2023,theaudit

committeemetsixtimes.

Audit committee

Attendance at

meetings

HenrikaNybondas-Kangas,chair 6/6

HeikkiTaulu,vicechair 6/6

MinnaHelle 6/6

PirjoVäänänen 6/6

MANAGING DIRECTOR

Employment Fund has a Managing Director

who is responsible for the Fund’s manage-

ment in accordance with the guidelines

andordersissuedbytheBoardofDirectors.

The Managing Director is responsible for

ensuring that Employment Fund’s accounts

are in accordance with the law and that its

financialaffairshavebeenarrangedinare-

liablemanner.TheManagingDirectormust

provide the Board of Directors and its mem-

bers with the information necessary for the

BoardofDirectorstoperformitsduties.

Employment Fund’s Managing Director is

JanneMetsämäki,LL.M.(b.1960).

61Report of the Board of Directors 2023

MANAGEMENT GROUP

The Management Group assists the Managing Director in the

management of Employment Fund’s operations and in achieving

EmploymentFund’sstrategicandoperationalgoals.TheManage-

mentGroupmeetsonaweeklybasis.In2023,themembersofthe

Management Group were:

Name

Year of

birth

Education

Duties/

responsibilities

Janne Metsämäki 1960 Master of Laws Managing Director

Tapio Oksanen,

until 31 July 2023 1958

Master of Economic

Sciences

Chief Financial

Officer

VirpiHalme 1976 Master of Laws

Director, Technology

and Development

Katja Knaapila, 1966

Master of Business

Administration

Director,HRand

Communication

Karo Nukarinen,

from 18 July 2023 1976

Master of Economic

Sciences

Chief Financial

Officer

Tuulikki Saari 1979 Master of Arts

Director, Customer

Relations

In addition to the Management Group, the Managing Director is

also assisted in operational management by the extended Man-

agement Group, which in addition to the Management Group, has

thefollowingmembers:PaulaKuntsi-Ruuska,RiskManager;Antti

Lähde,HeadofPMO;JohannaRahunen,ServiceManager;Terhi

Savikko,CommunicationsManager;PekkaRäsänen,CISO;and

Emma Siekkinen, Development Specialist (personnel representa-

tive).TheextendedManagementGroupsmeetsonceeachmonth.

The Fund’s projects are also steered and monitored by the portfolio

managementgroup.

LEGALITY AND COMPLIANCE OF OPERATIONS

Employment Fund’s operations comply with the law, the guide-

lines and regulations applying to the Fund, and the requirements

ofgoodgovernance.

INTERNAL CONTROL AND RISK MANAGEMENT

Employment Fund’s Board of Directors decides on the criteria for

the Fund’s internal control and risk management, approves the

Fund’s risk management principles and requires that Employment

Fund’s operations are organised so as to enable adequate internal

control and risk management across every level of the organisa-

tionandinallitsactivities.TheprinciplesofEmploymentFund’s

internal control and risk management apply to all functions of the

Fundandeachemployeeisresponsibleforimplementingthem.

Corporate governance

62Report of the Board of Directors 2023

Risk management and compliance are

partofinternalcontrol.Riskmanagement

means the systematic and proactive way

of identifying, analysing and managing

threats and opportunities arising from the

operations.Thepurposeofthecompliance

is to ensure that Employment Fund com-

plies with existing regulation, external

instructions binding on the Fund and the

Fund’sowninternalguidelines.Thefocus

isonpreventiveactivities.

Corporate governance

EmploymentFund’sinternalcontrolisbasedonthe‘threelinesofdefence’model.

Managing Director and Management Group

Audit

and

supervisory

authorities

Operatiivisen

johdon

sisäinen

valvonta

Board of Directors and Audit Committee

Supervisory Board

Internal

control of

operational

management

Internal

control

procedures

Risk

management

Compliance Internal audit

Line of defence

63Report of the Board of Directors 2023 Corporate governance

Internal audit

The Board of Directors of Employment

Fund decides on the operating model and

criteriafortheFund’sinternalaudit.The

Fund’s internal audit operates on the basis

of the plans discussed by the audit commit-

teeandapprovedbytheBoardofDirectors.

In 2023, the internal audit of Employment

Fund was purchased from Pricewater-

houseCoopersOy.TheFund’sinternalaudit

reports on its operations to the Board of

Directors and the audit committee on a

regularbasis.

Principles of organising

insider administration

Employment Fund has issued publicly

quotedbonds.EmploymentFundcomplies

with the Market Abuse Regulation (MAR)

and other applicable legislation, insider

guidelines and the rules for issuers of other

instrumentsofNasdaqHelsinkiLtd.Em-

ployment Fund also has insider guidelines

approved by the Board of Directors, which

describe the most important principles

governing the insider matters of Employ-

mentFund.

In accordance with MAR requirements,

Employment Fund maintains a list of

persons in management positions and

theirrelatedparties.Themembersofthe

Supervisory Board, members of the Board

of Directors, the Managing Director and the

ChiefFinancialOfficerhavebeendefined

by Employment Fund as persons holding

managementpositions.Apersonholdinga

management position in Employment Fund

may not, directly or indirectly, trade with an

EmploymentFund’sfinancialinstrument

for their own account or for the account of

a third party during a closed period, regard-

less of whether the person in question has

insideinformationatthattime.

For the duration of the closed period, Em-

ployment Fund also imposes trading re-

strictionsonallseparatelydefinedpersons

participating in the preparation of Employ-

mentFund’sinterimfinancialreportand

financialstatementrelease.Theclosedpe-

riod lasts for 30 days before the publication

ofthestatutoryinterimfinancialreportor

thefinancialstatementrelease,including

thedateofthepublication.

Employment Fund establishes an insider

list for each individual project, in which the

details of the persons with access to that

particular insider information is entered

(project-specificinsiderlists).Employment

Fund does not maintain the insider list’s

supplementary section listing permanent

insiders,butonlytheproject-specificlists

areused.

Employment Fund has a person responsi-

ble for insider issues who carries out the

duties of Employment Fund’s insider ad-

ministration.EmploymentFundhasapro-

cedure by which one can report a suspect-

edbreachoffinancialmarketprovisions

and regulations through an independent

channel.EmploymentFund’sanonymous

whistleblowing system serves as the

Fund’s reporting channel and it is accessi-

ble on Employment Fund’s internal intranet

websiteandonitspublicwebsite.

64Report of the Board of Directors 2023 Corporate governance

Principles concerning related parties

The regulations on related-party transac-

tions set out in the Limited Liability Com-

panies Act are not applicable to Employ-

mentFund’soperations.However,theFund

complies with IFRS standards and guide-

lines regarding related-party transactions

(IAS24).TherelatedpartiesofEmployment

Fund comprise the members of the Su-

pervisory Board, members of the Board of

Directors, the Managing Director, the main

auditor, the members of the Management

Group and their spouses, trustees, and con-

trolledundertakings.

Transactions involving related parties are

handled in accordance with the guidelines

on related-party transactions approved

bytheBoardofDirectors.Thelistofrelat-

ed parties is maintained by Employment

Fund’sComplianceOfficer.

AUDITOR AND AUDITOR’S FEES

The Supervisory Board of Employment

Fund selected KPMG Oy as the Fund’s

auditorfor2023.MarcusTötterman,Au-

thorisedPublicAccountant,KHT,actedas

themainauditor.Theauditor’sfeesfor2023

comprise EUR 91,297 in audit-related costs

paid to KPMG Oy and EUR 0 paid for other

services.

65Report of the Board of Directors 2023 Remuneration report

Remuneration report

Employment Fund is not a limited liabil-

ity company and thus the regulations on

remuneration principles and reporting are

not directly applicable to the Fund’s opera-

tions.Therefore,EmploymentFund’sremu-

neration report for 2023 has been drawn

up, where applicable for Employment Fund,

in compliance with the Finnish Corporate

GovernanceCode2020(www.cgfinland.

fi),publishedbytheSecuritiesMarket

Association.

FEES AND OTHER BENEFITS PAID TO THE

MEMBERS OF THE SUPERVISORY BOARD

On 22 October 2020, on the proposal of the

labour market parties, the Government

appointed the members of Employment

Fund’s Supervisory Board for the term

1January2021–31December2023.

TheMinistryofSocialAffairsandHealth

decides on the remuneration for meet-

ings for the Supervisory Board and the

principles of compensation for travelling

expenses.

On 22 October 2021, the Ministry of Social

AffairsandHealthdecidedthatthefeesfor

the members of the Supervisory Board are

as follows: for the chair, EUR 310 per month

and EUR 410 per meeting, for the vice chair

andothermembers,EUR310permeeting.

TheSupervisoryBoardmettwicein2023.

66Report of the Board of Directors 2023

In 2023, the fees for the members of the Supervisory Board were paid as follows:

Name

Meeting fee of the

Supervisory Board

members

Annual fee of the

Supervisory Board

chair Travel expenses

Total on 31

December 2023

Attendance at meetings

of the Supervisory Board

Annika Rönni-Sällinen, chair 820 3,720 4,540 2/2

Antti Zitting, vice chair 620 0 106 726 2/2

Riku Aalto 620 0 620 2/2

Jari Jokinen 620 0 620 2/2

Teemu Kokko 620 0 620 2/2

Antti Korpiniemi 620 0 620 2/2

Tomi Lantto 620 0 620 2/2

Kirsi-Marja Lievonen 310 0 310 1/2

Petri Lindroos 620 0 620 2/2

Salla Luomanmäki 310 0 310 1/2

Jorma Malinen 310 0 310 1/2

Matti Mettälä 620 0 620 2/2

Taina Niiranen 620 0 268 888 2/2

Olli Nikula 620 0 620 2/2

Silja Paavola 620 0 620 2/2

Juha Rosted 620 0 126 746 2/2

Saila Ruuth 310 0 310 1/2

Millariikka Rytkönen 620 0 620 2/2

Total 10,120 3,720 500 14,340

Remuneration report

67Report of the Board of Directors 2023

FEES AND OTHER BENEFITS PAID TO THE

MEMBERS OF THE BOARD OF DIRECTORS

The Supervisory Board decides on the remuneration of the Board

ofDirectors.On26August2021,theSupervisoryBoarddecidedthat

the fees for the members of the Board of Directors are as follows:

Task Fee EUR per month Fee EUR per meeting

ChairoftheBoard 1,030 410

VicechairoftheBoard 820 310

Other members of the Board of

Directors 515 255

No other remuneration or supplementary pension arrangements

areinplaceforthemembersoftheBoardofDirectors.

In2023,theBoardofDirectorsmet11times.TheBoardofDirectors

also held two strategy meetings, for which no remuneration is

paid.

In 2023, the fees for the members of the Board of Directors were

paid as follows:

Name

Annual fees

of the Board

of Directors

Meeting fees

of the Board

of Directors

Total on 31

December

2023

Attendance at

meetings of

the Board of

Directors

VesaRantahalvari,

chair

12,360 4,510

16,870

11/11

Pekka Piispanen,

vice chair

9,840 3,410

13,250

11/11

Tuomas Aarto

6,180 2,805

8,985

11/11

Jarkko Eloranta

6,180 2,550

8,730

10/11

Minna Etu-Seppälä

6,180 2,295

8,475

9/11

RiikkaHeikinheimo

6,180 2,805

8,985

11/11

MinnaHelle

6,180 2,805

8,985

11/11

Markku Jalonen

6,180 2,805

8,985

11/11

Patrizio Lainà

6,180 2,805

8,985

11/11

Henrika

Nybondas-Kangas

6,180 2,805

8,985

11/11

Antti Palola

6,180 2,805

8,985

11/11

Saana Siekkinen

6,180 2,550

8,730

10/11

HeikkiTaulu

6,180 2,805

8,985

11/11

PirjoVäänänen

6,180 2,550

8,730

10/11

Total 96,360 40,815 136,665

Remuneration report

68Report of the Board of Directors 2023

ThefeesfortheauditcommitteewereEUR410permeetingforthe

chairandEUR255permeetingforthemembersofthecommittee.

In2023,theauditcommitteemetsixtimes.

In 2023, the fees for the members of the audit committee were paid

as follows:

Name

Meeting fees

for the audit

committee

Total on 31

December

2023

Attendance at audit

committee meetings

HenrikaNybondas-

Kangas, chair 2,460 2,460 6/6

HeikkiTaulu,vice

chair 1,530 1,530 6/6

MinnaHelle 1,530 1,530 6/6

PirjoVäänänen 1,530 1,530 6/6

Total 7,050 7,050

REMUNERATION SCHEME FOR THE MANAGING DIRECTOR

A separate remuneration scheme approved by the Board of Di-

rectorsappliestotheManagingDirector.TheBoardofDirectors

decidesonthepaymentofanybonuses.Thebonusesoftheother

management members are based on a remuneration scheme ap-

provedbytheBoardofDirectors.BasedonaproposaloftheMan-

aging Director, and in accordance with approved bonus criteria, the

BoardofDirectorsdecidesonthepaymentofbonuses.

ThesalariesandotherbenefitsandfeespaidtotheManaging

Directorfor2023areshowninthefollowingtable.Socialsecurity

contributionsareexcluded.

Position

Salary

and fringe

benefits

Variable

performance-

related bonus

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Managing

Director 174,739 13,162 187,901 178,559

TERMS OF EMPLOYMENT OF THE MANAGING DIRECTOR

The Managing Director’s terms of employment have been deter-

mined by the Board of Directors and they are stated in a written

employmentcontract.TheremunerationoftheManagingDirec-

torconsistsofafixedsalaryandavariableperformance-related

bonus.Performancetargetsandanyremunerationtobepaidare

approvedbytheBoardofDirectors.ThefixedsalaryoftheMan-

aging Director comprises a monetary compensation and taxable

benefits(meal,telephoneandcarbenefits).Theretirementageand

pension accrual of the Managing Director are based on the gener-

alemploymentpensionlegislation.TheFundhasnotprovideda

supplementarypensionarrangementfortheManagingDirector.

The Managing Director’s notice period is based on the Employment

ContractsActforbothparties.

Remuneration report

69Report of the Board of Directors 2023

REMUNERATION FOR THE MANAGEMENT GROUP

The remuneration of Employment Fund’s Management Group con-

sistsofafixedsalaryandatelephonebenefitaswellasavariable

performance-relatedbonus.In2023,themaximumbonuswasset

at12%oftheannualsalaryincludingfringebenefits.Thefixed

salarycomprisesamonetarycompensationandtaxablebenefits

(mealandtelephonebenefitsandcarbenefit).

The Management Group’s performance-related bonus is based on

a remuneration scheme approved by the Board of Directors each

year.BasedonaproposaloftheManagingDirector,andinaccord-

ance with approved bonus criteria, the Board of Directors decides

onthepaymentofbonuses.

ThesalariesandotherbenefitsandfeespaidtotheManagement

Groupduring2023areshowninthefollowingtable.Socialsecurity

contributionsareexcluded.

Position

Salary

and fringe

benefits

Variable

performance-

related bonus

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Management

Group 515,224 30,413 545,637 567,749

TERMS OF EMPLOYMENT OF THE MANAGING GROUP

The terms of employment for Management Group members have

beendefinedinawrittencontract.Theretirementageandpension

accrual of the Management Group members are based on the gen-

eralemploymentpensionlegislation.TheFundhasnotprovideda

supplementary pension arrangement for the Management Group

members.TheManagementGroupmembers’noticeperiodisde-

finedintheemploymentcontractforbothparties.

Remuneration report

Financial

statements

71Financial statements 2023

Financial Statements (IFRS) 2023

Statement of changes in net position

STATEMENT OF CHANGES IN NET POSITION

ThefiguresareinEURthousand.

Change in net position Note 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022

Contributions collected

Unemployment insurance contributions and other income 5 3,627,462 3,490,831

Total contributions collected 3,627,462 3,490,831

Financing contributions paid

Financing contributions paid 6 -2,900,224 -2,809,083

Administrative expenses 7 -33,528 -22,685

Total financing contributions paid -2,933,752 -2,831,768

Net fair value gains on investments 14 70,642 -36,155

Financing costs 8 -1,293 1,806

Total change in net position 763,059 624,714

72Financial statements 2023

STATEMENT OF NET POSITION

ThefiguresareinEURthousand.

Assets Note 31 Dec 2023 31 Dec 2022

Non-current assets

Property, plant and equipment

9 3,210 3,365

Intangible assets

10 872 2,581

Total non-current assets 4,083 5,946

Current assets

Receivables from unemployment

insurance contributions

11 16,158 13,626

Accruals of unemployment insurance

contributions

11 730,652 701,769

Other receivables

13 108,567 96,348

Investment assets

15 1,652,468 1,660,524

Cash and cash equivalents

16 216,479 224,711

Total current assets 2,724,324 2,696,977

Total assets 2,728,407 2,702,923

Net position and liabilities Note 31 Dec 2023 31 Dec 2022

NET POSITION

For previous periods 1,257,977 633,263

For the period 763,059 624,714

Total net position 2,021,036 1,257,977

Non-current liabilities

Bonds

17 598,638 598,205

Total non-current liabilities 598,638 598,205

Current liabilities

Loans

17 0 700,404

Unemployment insurance contribution

liabilities

11 1,444 1,533

Other liabilities

18 107,289 144,805

Total current liabilities 108,733 846,741

Total liabilities 707,371 1,444,946

Total net position and liabilities 2,728,407 2,702,923

Statement of net position

73Financial statements 2023

STATEMENT OF CASH FLOWS

ThefiguresareinEURthousand.

Cash flows 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022

Unemployment insurance contributions collected 3,516,887 3,484,581

Benefitspaid -2,856,752 -2,901,148

Interests paid -5,531 -2,186

Net cash flow from ordinary operations 654,603 581,247

Cash flows from investments

Purchases of intangible assets -212 -971

Investmentsinfinancialinstruments -3,794,334 -2,954,750

Sales of investment instruments and realised income 3,831,681 2,307,437

Net cash flow from investments 37,136 -648,283

Loans withdrawn and repaid -699,971 -578

Net cash flow from financing activities -699,971 -578

Net increase/decrease in cash and cash equivalents -8,232 -67,615

Cashandcashequivalentsatthebeginningofthefinancial

period 224,711 292,326

Cash and cash equivalents at the end of the financial period 216,479 224,711

Statementofcashflows

74Financial statements 2023 Notestothefinancialstatements

Notes to the financial statements

1 GENERAL INFORMATION

Employment Fund (‘the Fund’) (business

identity code 1098099-7), established in

2019 by law, is an independent institution

managed by labour market parties and

supervised by the Ministry of Social Affairs

andHealthandtheFinancialSupervisory

Authority.Itsmaintaskistofinanceunem-

ploymentbenefitsandgrantadulteduca-

tionbenefits.TheFundalsodirects,devel-

ops and supervises the implementation of

the collection procedure of unemployment

insurance contributions and determines

and collects the employer’s liability compo-

nentandtransitionsecuritycontribution.

The Fund also grants and pays employ-

er’strainingcompensations.Thetrain-

ing compensation is based on the Act on

CompensationsforTraining(1140/2013).

EmploymentFundisdomiciledinHelsinki

and its address is Itämerenkatu 11–13, 00180

Helsinki.

The principal accounting policies applied

inthefinancialstatementsoftheFundare

setoutbelow.Thesepolicieshavebeen

consistentlyappliedtofinancialperiods

presentedunlessotherwisestated.

2 SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES AND

COMPARABILITY OF FINANCIAL PERIODS

2.1 Basis of preparation

EmploymentFund’sfinancialstatements

have been prepared in accordance with In-

ternational Financial Reporting Standards

(IFRS) as adopted by the European Union,

conforming with the IAS and IFRS stand-

ards as well as the SIC and IFRIC interpre-

tationsapplicableasper31December2023.

IFRS refers to the standards and interpreta-

tions applicable to corporations and set out

in the Finnish Accounting Act and the pro-

visions issued under it in accordance with

the procedure laid down in Regulation (EC)

No 1606/2002 of the European Parliament

andoftheCouncil.Thenotestothefinan-

cial statements also comply with Finnish

accounting and corporate legislation sup-

plementingIFRSstandards.

EmploymentFundisanon-profit,gov-

ernment-affiliatedfundwhoseoperations

are based on the Act on the Financing of

UnemploymentBenefits,theDecreeofthe

FinancingofUnemploymentBenefitsand

on the Decree on Rules of Procedure of

Employment Fund with amendments, as

statedinsection1.

Employment Fund collects and pays un-

employmentinsurancecontributions.The

Fund does not carry out business opera-

tions in which it would generate revenues

arising from the sale of goods or rendering

ofservices.DuetothenatureoftheFund’s

Accountingpoliciesofthefinancialstatements

75Financial statements 2023 Notestothefinancialstatements

operations, the Fund does not generate

revenues, and common revenue recognition

principlesdonotapply.IFRSstandardsdo

not directly regulate the structure of the

IFRSfinancialstatementsofafundlike

Employment Fund, or the basis for recog-

nitionandmeasurementoftransactions.

Employment Fund applied the framework

of IFRS standards and general principles

for recognition and measurement when it

prepareditsIFRSfinancialstatements.Due

to these factors, the primary statements of

theFund’sIFRSfinancialstatementsare

the statement of changes in net position,

the statement of net position, and the cash

flowstatement.

Thechangesinnetpositionforthefinan-

cial period consist of the sum of unemploy-

ment insurance contributions collected and

paid,gainsoninvestmentsandfinancial

items.ThedifferencebetweentheFund’s

assetsandliabilitiesreflectstheaccumu-

lated net position, which is also referred

toasthebusinesscyclebuffer.Amore

detailed description of the business cycle

bufferisprovidedinnote4.2.Employment

Fundhasnosharesorequity.Therefore,

theseIFRSfinancialstatementsdonot

includethestatementofchangesinequity.

However,thestatementofchangesinnet

position is presented as a separate primary

statement.

Duringthepresentedfinancialperiods,the

Fund did not have any such transactions

that should have been recognised in other

comprehensiveincome.Therefore,these

IFRSfinancialstatementsdonotincludea

statementofothercomprehensiveincome.

Employment Fund does not operate as an

insurer as it does not issue or hold insur-

anceorreinsurancecontracts.Therefore,

the Fund’s operations are not within the

scopeofIFRS17InsuranceContracts.The

principal valuation method used in the

financialstatementsistheacquisitioncost,

althoughfinancialassetsandliabilitiesrec-

ognisedatfairvaluethroughprofitorloss

aremeasuredatfairvalue.Thefinancial

statements are presented in euros unless

otherwisestated.

Thepreparationoffinancialstatementsin

conformity with IFRS requires the use of

certaincriticalaccountingestimates.Italso

requires management to exercise its judge-

ment in the process of applying the account-

ingpoliciesofthefinancialstatements.The

significantaccountingestimatesandjudg-

mentsaredescribedinnote3.

There are no new IFRS standards or IFRIC

interpretations that are not yet effective

and that would be expected to have a

materialimpactonEmploymentFund.

76Financial statements 2023 Notestothefinancialstatements

2.2 Foreign currency translation

Thefinancialstatementsarepreparedin

euros, which is Employment Fund’s func-

tionalandpresentationcurrency.The

Fund’s foreign currency transactions are

translated into the operating currency at

the exchange rates prevailing on the trans-

actiondates.Depositsdenominatedinfor-

eign currencies are measured at fair value

throughprofitandloss,andtheeffectsof

changes in exchange rates have been pre-

sentedaspartofthetotalfairvaluechange.

2.3 Unemployment insurance contributions

Employment Fund determines and col-

lects unemployment insurance contri-

butions based on chapter 7 of the Act on

theFinancingofUnemploymentBenefits.

Employers report the paid wages to the

IncomesRegister.Unemploymentinsur-

ance contributions are determined four

times per year based on the earnings pay-

ment data for the three preceding calendar

months.Unemploymentinsurancecontri-

butionincomeisrecognisedinthefinan-

cial statements on an accrual basis, and

the unemployment insurance contribution

incomeforthefinalquarteroftheyearis

recognised in the balance sheet under pre-

paymentsandaccruedincome.

Employer’s liability components and

transition security contributions

Employment Fund determines and collects

liabilitycomponentsfromemployers.The

liability component applies to employers

whose payroll, serving as the basis for the

calculation of the unemployment insurance

contribution, exceeds the minimum level

ofEUR2,251,500(in2023).Anemployer

may be obligated to pay the liability com-

ponent if it has dismissed or laid off an

aged employee whose employment rela-

tionship has lasted at least three years and

the employee has been unemployed or laid

offforalongtime.Unemploymentbenefit

expensesarefinancedwiththeliability

components.

Collected liability components that cover

the cost of daily unemployment allowanc-

es are recognised as income for the period

when the amount of income can be relia-

blymeasured.Inordertocoverthecostof

additional daily allowances, the collected

liability components are recognised as

incomewithinseveralfinancialperiods

based on the estimate of the realisation of

correspondingexpenses.

The statutory transition security scheme

enteredintoforceinJanuary2023.Em-

ployment Fund can collect the transition

77Financial statements 2023 Notestothefinancialstatements

security contribution from an employer dis-

missing an employee on production-relat-

edorfinancialgroundsiftheemployeein

question has reached the age of 55 and has

been employed by the employer in question

foratleastfiveyears.Thetransitionsecu-

rity contribution applies to large employers

whose payroll on which the unemployment

insurance contributions are based ex-

ceedsaspecificminimumlevelintheyear

precedingthedateofdismissal.In2023,the

minimumlevelstoodatEUR2,251,500.

The additional days of unemployment

allowancewillsoonbeabolished.The

persons born in 1964 are the last age group

eligiblefortheadditionaldays.Thisalso

means that the employer will no longer

be obliged to pay a liability component for

employees that they have dismissed or laid

off.Thismeansthatthetransitionperiod

for the liability component will end by the

year2035.

Transition security is intended for employ-

ees aged 55 or over dismissed on produc-

tion-relatedorfinancialgrounds,andit

contains a transition security allowance,

right to training and an extended job search

leave.Thetransitionsecuritytrainingis

provided by the Employment and Economic

DevelopmentOfficeanditcorrespondsto

the maximum of two months’ salary of the

dismissedemployee.Thetransitionsecuri-

ty allowance is paid by the unemployment

fund or the Social Insurance Institution of

Finland and it corresponds to one month’s

salaryofthedismissedemployee.

EmploymentFundwillfinancethetran-

sition security scheme with a transition

security contribution collected from the

employer.Thecontributioncomprisestwo

parts of equal size: a common part and a

portion collected from the employer dis-

missingtheemployee.Thecommonpartis

collected from all employers by raising the

unemploymentinsurancecontribution.A

commonpartof0.03percentagepointsis

included in the unemployment insurance

contributions collected by Employment

Fundfromemployers.Thecontributions

collected from individual employers are

recognisedintheresultsforthefinan-

cial period on an accrual basis under the

account category ‘Liability component

andtransitionsecuritycontribution’.The

non-invoiced part of the contributions is

recognised in the balance sheet under pre-

paymentsandaccruedincome.

78Financial statements 2023 Notestothefinancialstatements

Reconciliation based on chapter 12, section

3 of the Employment Contracts Act

Under the Employment Contracts Act,

when a court of law considers a reconcili-

ation matter, it must provide Employment

Fundwiththeopportunitytobeheard.As

a rule, 75% of the earnings-related daily

unemployment allowance received by the

employee during the indemnity period is

deducted from the indemnity imposed on

the employer for wrongful termination

ofemployment.Thecourtmustorderthe

employer to pay the amount deducted from

the compensation to Employment Fund

andinformitofthefinaljudgmentorruling

onthecase.Thepaymentofthededuction

to the Fund must also take place when the

employer and the employee reach a set-

tlement on the compensation payable for

wrongfulterminationofemployment.

Receivables subject to debt-collection

The Fund collects and monitors neglected

unemployment insurance contributions,

those subject to enforcement and the con-

tributions due by companies in bankruptcy

ordebtrestructuringproceedings.Asthe

receivablesdonotincludeanysignificant

financialcomponents,theFundhasused

thesimplifiedmodelpermittedbyIFRS9.

2.4 Subsidies to unemployment funds

Under the Act on the Financing of Unem-

ploymentBenefits(555/1998),withregard

tothefinancingofearnings-relatedunem-

ployment allowances, Employment Fund

is liable for the costs incurred from unem-

ployment allowances, employment pro-

motion measures and from job alternation

compensation, insofar as the state or indi-

vidual unemployment funds are not liable

forthese.Theabove-mentionedbenefitsare

paidfromtheunemploymentfunds.

Employment Fund is also liable for the

insurance contributions for unemployed

persons and recipients of the adult educa-

tion allowance that are paid through the

Finnish Centre for Pensions to the employ-

mentpensioninstitutions.

Under the Decree on the Implementa-

tion of the Act on Unemployment Funds

(272/2001), Employment Fund is tasked

with processing prepayment applications

and payment decisions and monitoring

thesufficiencyofprepayments.TheFund

makes prepayments to the unemployment

funds twice a month in accordance with

the budget approved at the end of the pre-

viousfinancialperiod.TheFundreceives

monthly statistics from the Financial

Supervisory Authority on the accumulat-

ed allowances paid by the unemployment

funds to their customers, and based on that,

the Fund has accrued the prepayments and

79Financial statements 2023 Notestothefinancialstatements

actual payments to each unemployment

fund either as a receivable or liability in

itsaccounts.Thisaccrualisrecognisedby

benefittype.Thetransitionsecurityallow-

ancewasaddedtothebenefittypesoffered

by the unemployment funds from the start

of2023.Transitionsecurityisusedtofi-

nance expenses arising from the transition

security allowance intended for dismissed

employeesaged55andover.

TheMinistryofSocialAffairsandHealth

pays to Employment Fund the government

contributions that the Fund pays to the

unemploymentfundsasfinancingcontri-

butions.TheFundtransferstheprepay-

ments of government contributions to the

unemploymentfundsonthefirstbanking

dayofeachmonth.In2023,theMinistryof

SocialAffairsandHealthpaidgovernment

contributionstotheFundasfixedmonthly

prepayments unless otherwise proposed by

EmploymentFund.

The income received from the ministries

and the expenditures paid to the unem-

ployment funds have been recognised

inamountscorrespondingtothebenefit

payments made by the funds to their cus-

tomers.TheMinistryofSocialAffairsand

Healthwillapprovethefinancialstate-

ments of the unemployment funds on the

basisoffinalinformationinsummer2024,

at which point the Fund will make equal-

isations in the account balances between

theunemploymentfundsandthestate.

Under section 4 of the Act on the Financing

ofUnemploymentBenefits,Employment

Fund has sole responsibility for funding the

increased earnings-related component laid

down in section 6 of the Unemployment

SecurityAct.Fromthebeginningof2015,

the means by which the higher income

earnings-related unemployment allowanc-

es are calculated was changed so that the

levelofallowancesdecreasedslightly.The

same change was carried out regarding the

supplementary earnings-related allowanc-

es.Thesechangesimplementthereduction

ofunemploymentallowancesasspecified

in the Finnish Government’s framework

decision.Thechangehasdecreasedex-

penditure related to earnings-related daily

unemploymentallowances.Toimplement

government savings, Employment Fund

pays the amount of savings (about EUR

50.3million)yearlytotheSocialInsurance

InstitutionofFinlandtofinancebasicso-

cial security under section 23 of the Act on

theFinancingofUnemploymentBenefits

(555/1998).

Payments to the Finnish Centre

for Pensions and State Pension

Fund and the interest on them

Employment Fund’s second-largest ex-

pense has been the contribution paid to the

Finnish Centre for Pensions to cover the

pension liabilities and expenses arising

from taking into account the time of un-

employment, education and job alternation

leave (sections 74 and 182 of the Employees

PensionsAct[395/2006]).Theamountof

this contribution is determined by estimat-

ing the average amount of pension contri-

butions that would be paid for the unpaid

periods that constitute the basis of the ac-

cruedpensionsecurity.Asstatedabove,the

Fund is liable to pay the contribution laid

down in sections 62 and 133 of the State

Employees’ Pensions Act (1295/2006) to the

StatePensionFund.

80Financial statements 2023 Notestothefinancialstatements

Payments made to the Finnish Centre for

Pensionsforthefinancialperiodinaccord-

ance with section 12c of the Employees

Pensions Act (561/1998) are based on an

estimate provided by the Finnish Centre

forPensionsandadjustedinthefinancial

statements.Thedifferencebetweenthe

payments made and the adjusted estimate

is recognised as prepayments and accrued

incomeoraccrualsanddeferredincome.

Thefinalpaymentamountisreceivedfrom

the Finnish Centre for Pensions in the

springoftheyearfollowingthefinancial

period,andthedifferencebetweenthefinal

payment and payment estimate used in

thefinancialstatementsispresentedasan

adjustment, an equalisation payment for

the previous year, in the following year’s

financialstatements.Therevisedpayment

for the year and the equalisation payment

forthepreviousyearhavebeenspecifiedin

thenotestothefinancialstatements.

The Finnish Centre for Pensions assigns

interest on the charges imposed on Em-

ployment Fund according to the TyEL

premiuminsuranceinterestrate.The

revisedpaymentincludedinthefinancial

statements accrues interest until the end of

thefinancialperiod(debitinginterest).The

Finnish Centre for Pensions refunds the

interest to Employment Fund according to

the actual payments and times of payment

(compensatoryinterest).

Thefinalpaymentamountdeterminedin

the following year accrues interest until the

clearance date agreed between the Finn-

ish Centre for Pensions and Employment

Fund(previousyear’sdebitinginterest).

Compensatory interest is correspondingly

calculated for all payments made by the

Fund in the previous year (compensatory

interestforthepreviousyear’spayments).

The debiting and compensatory interests

for payments to the State Pension Fund

are calculated in a manner identical to the

above.

Settlement to the Social Insurance

Institution of Finland of income

from the unemployment insurance

contributions of employees who are not

members of unemployment funds

Under sections 8 and 23 of the Act on

the Financing of Unemployment Bene-

fits(555/1998),theFundmakesanannual

prepayment to the Social Insurance Institu-

tion of Finland from the employees’ unem-

ployment insurance contribution income,

corresponding to the percentage of employ-

ees who are not members of an unemploy-

mentfund.Theamountofthesettlementis

estimated from data collected by Statistics

Finland, and the estimate is approved by

theMinistryofSocialAffairsandHealth.

Thefinalamountofthepaymentisbased

on a calculation prepared by the Ministry

ofSocialAffairsandHealthoftheamount

ofbenefitsfinancedinthismannerpaidby

the Social Insurance Institution of Finland

duringthefinancialperiod.Thetransition

security allowance was added to the ben-

efitsfinancedfrom1January2023.Tran-

sitionsecurityisusedtofinanceexpenses

arising from the transition security of

dismissed employees aged 55 and over who

arenotmembersofunemploymentfunds.

81Financial statements 2023 Notestothefinancialstatements

Adult education benefits

Employment Fund grants and pays adult

education allowances and scholarships

forqualifiedemployeesinaccordance

withtheActonAdultEducationBenefits

(1276/2000).EmploymentFundisalsore-

sponsibleforfinancingtheadulteducation

allowances for employees and scholarships

forqualifiedemployeesworkingforem-

ployersotherthancentralgovernment.The

stateisresponsibleforfinancingadulted-

ucation allowances for entrepreneurs and

scholarshipsforqualifiedemployeeswork-

ingforcentralgovernment.Theresponsi-

bilityforfinancingisspecifiedinsection30

oftheActonAdultEducationBenefits.

Financing of pay security

Under section 31 of the Pay Security Act

(866/1998), Employment Fund is responsi-

bleforthestate’spaysecurityexpenses.

Pay security expenses are paid once per

year, normally in the spring of the following

year, to the Ministry of Economic Affairs

and Employment, based on an invoice sent

bytheMinistry.

Transition security training

The transition security scheme that en-

tered into force from the start of 2023

includes transition security training for

employees aged 55 and over dismissed on

production-relatedorfinancialgrounds.

EmploymentFundisresponsibleforfi-

nancingthetraining.Employeescovered

by transition security are eligible for transi-

tion security training corresponding to pay

oftwomonthspurchasedbyaTEOffice.

The Development and Administration

CentreforELYCentresandTEOffices(KE-

HA)compilestheinformationontraining

expenses and invoices them on a quarterly

basis from Employment Fund in accord-

ancewithactualcosts.

Member State invoicing for

unemployment allowances

Article 65 of Regulation (EC) No 883/2004

of the European Parliament and of the

Council on the coordination of social se-

curity systems (basic regulation) provides

for situations in which a person becomes

unemployed after working in a Member

Stateotherthantheircountryofresidence.

In Finland, Employment Fund has been

designated as the competent body when

implementing this basic regulation with

regard to earnings-related unemployment

insurance.TheFund’sresponsibilities

include the payment and collection of the

compensation laid down in paragraphs 6

and 7 of Article 65, incurred from unem-

ployment allowance paid to the members of

unemploymentfunds.

The Fund applies for compensation from

Member States depending on how the

unemployment funds have paid the unem-

ployment allowances to those who have

beenworkinginanotherMemberState.In

turn, Member States apply for compensa-

tion from Employment Fund for citizens of

other Member States that have worked in

Finland.Thebenefitswillbefullyrepaid

but not more than the amount that would

have been paid in the country of employ-

ment.Incomeandexpensesarerecognised

onacashbasis.

82Financial statements 2023 Notestothefinancialstatements

Training compensation

Employment Fund manages employers’

trainingcompensation.Thetrainingcom-

pensation is based on the Act on Compen-

sationsforTraining(1140/2013).Thetrain-

ingcompensationisafinancialsupportto

develop competence for those employers

who are not eligible for a training deduc-

tion granted by the Business Income Tax

ActorAgriculturalIncomeTaxAct.These

employers include municipalities, parishes

andnon-profitorganisations.Thepurpose

of the training compensation is to improve

the employer’s opportunities to organise

training for its employees so that they can

enhancetheirvocationalcompetence.

Training compensation can be granted

for a maximum of three training days per

employeeannually.Thefinancingoftrain-

ing compensation has been designated so

that each calendar year, the Ministry of

Finance pays the amount that the Fund has

refunded to employers in the form of train-

ing compensation based on an application

fromEmploymentFund.

Pensions and employee benefits

EmploymentFundonlyhasdefinedcontri-

butionpensionschemes.Statutorypen-

sions are managed by a pension insurance

provider.Pensioncontributionsarerecog-

nisedasexpensesforthefinancialperiod

inwhichthepaymentsareincurred.The

Fund has a bonus system for its employ-

ees.TheBoardofDirectorsdecidesonthe

payment of any bonuses on the Managing

Director’s proposal and in compliance with

thebonuscriteria.Realisedbonusesare

recognisedasexpensesforthefinancial

periodrelevanttothebonussystem.

2.5 Property, plant and equipment

Property, plant and equipment comprises

the Fund’s machinery and equipment and

theleaseholdimprovements.Property,

plant and equipment are measured in the

statement of net position at the historical

cost minus the accumulated depreciation

andimpairmentcharges.

Leasehold improvements are added to the

premises improvement’s carrying value

when it is probable that future economic

benefitsassociatedwiththeitemwillflow

totheFund.Theexpensesofordinaryre-

pair and maintenance costs are reported in

theperiodinwhichtheyareincurred.

Depreciation on property, plant and equip-

ment is calculated using the straight-line

methodovertheirestimatedusefullives.

As a rule, the residual value is estimated to

bezero.Assets’residualvaluesanduseful

livesarereviewedwhenfinancialstate-

mentsareprepared.Depreciationperiods

areadjustediftheestimatechangessignifi-

cantly.Estimatedusefullivesbyassetclass

are as follows:

• Leasehold improvements 5 years

• Machines and equipment 3 years

Gains and losses on disposal and decom-

missioning of property, plant and equip-

ment are calculated as the difference be-

tweennetproceedsandthecarryingvalue.

Gains and losses on disposals are included

in the administrative expenses in the state-

mentofchangesinnetposition.

83Financial statements 2023 Notestothefinancialstatements

2.6 Intangible assets

Intangibleassetswithfiniteusefullife

comprise acquired or internally produced

computer software, and other intangible

assets when it is probable that future eco-

nomicbenefitsassociatedwiththeasset

willflowtotheFundandthecostcanbe

measuredreliably.Implementationcosts

related to the cloud computing service ar-

rangement, which is a service contract, are

primarily recorded as expenses incurred

when the relevant implementation service

isobtained.Implementationcostsrelated

to the cloud service arrangement are only

capitalised and amortised over a longer

period of time in cases where the imple-

mentation service is not distinct from the

service that allows access to the software,

or when the costs relate to the creation of a

separateintangibleasset.

The cost of an internally generated intan-

gibleassetisdefinedasthesumofdirectly

attributable production costs allocated to

theasset.

Costs associated with maintaining com-

puter software are reported as expenses

incurred.Researchcostsarerecognisedas

anexpenseinthefinancialperiodinwhich

theyareincurred.Developmentcoststhat

are attributable to the design and testing

ofnewsoftware,ortosignificantchanges

to existing software, are capitalised only

when they meet the above-mentioned cri-

teria of recognition to the statement of net

position.

Intangibleassetswithfiniteusefullifeare

measured at historical cost less amortisa-

tionandimpairmentcharges.Amortisation

of intangible assets is calculated using the

straight-linemethodovertheirusefullives.

Estimated useful lives by asset class are as

follows:

• Computer software 3 years

• Software development expenditure

3years

2.7 Impairment of non-financial assets

Attheendofeachfinancialperiod,itisas-

sessed whether there have been any events

or changes in circumstances that indicate

that the value of an intangible asset or

an item of property, plant and equipment

subject to amortisation or depreciation may

havechanged.Ifthereareanyindicators

of impairment, the recoverable amount is

determined.

The recoverable amount is the asset’s fair

value less the costs of disposal or the value

inuse,whicheverishigher.Valueinuse

refers to the asset’s expected future net

cashflowsthathavebeendiscountedto

net present value by using the determined

discountrate.Animpairmentlossisrec-

ognised in the statement of changes in

net position for the amount by which the

asset’s carrying value exceeds its recovera-

bleamount.Theusefullifeofadepreciated

asset is reviewed in connection with the

recognitionofimpairmentlosses.

Impairments are reversed if circumstances

change and an asset’s recoverable amount

84Financial statements 2023 Notestothefinancialstatements

changes after the recognition of the impair-

ment but not to an amount higher than the

carrying value would be without the im-

pairmentcharge.

2.8 Financial assets and liabilities

Financial assets

Employment Fund applies the IFRS 9 (Fi-

nancial Instruments) standard, which was

published by the International Accounting

Standards Board and took effect on 1 Jan-

uary2018.IFRS9specifieshowanentity

shouldclassifyandmeasurefinancial

assets.Italsoincludesamodelforimpair-

ment charges based on expected losses and

generalrequirementsforhedgeaccounting.

IFRS9requiresfinancialassetstobeclas-

sifiedintothreemeasurementcategories:

those measured at amortised cost, those

measured at fair value through other com-

prehensive income and those measured at

fairvaluethroughprofitandloss.Forfinan-

cial liabilities, the standard retains most of

theIAS39requirements.Forimpairment,

a model based on expected credit losses is

used.

EmploymentFund’sfinancialassetscon-

sist of investments as well as cash and

cashequivalents.Onthedateofacquisi-

tion,themanagementoftheFundclassifies

thefinancialassetsintoclassesthatdeter-

minethebasisofvaluation.Allfinancial

assets are recognised on the trade date (the

day when the Fund commits to buy or sell

theasset).

Investments are presented in the statement

of net position as current assets unless

their maturity is over 12 months and the

management intends to dispose of them

more than 12 months after the reporting

date.

Investments are initially recognised at fair

value.Transactioncostsarerecogniseddi-

rectlyasexpenses.Afterinitialrecognition,

the investments are measured at fair value

on each reporting date, and realised and

unrealised changes in fair value are recog-

nised in the statement of changes in net

positionintheperiodinwhichtheyarise.

Net changes in fair value are presented in

the statement of changes in net position

on the line ‘Net income from measuring

investmentsatfairvalue’.Allinterestand

dividend income from investments are

includedinthenetchangeofthefairvalue.

Thebasisfordefiningfairvalueispresent-

edinnote13.

Financial assets are de-recognised when

therightstoreceivecashflowshaveex-

pired or have been transferred to another

party such that all the risks and rewards

havebeentransferred.

85Financial statements 2023 Notestothefinancialstatements

Cash and cash equivalents

Cash and cash equivalents comprise cash

in hand and deposits held at call with

banks.

Loans

Loans are recognised initially at fair value,

thenetofthetransactioncostsincurred.

Loans are subsequently carried at amor-

tisedcost.Anydifferencebetweenthe

proceeds (net of transaction costs) and

the redemption value is recognised in the

statement of changes in net position over

the period of the loan using the effective

interestmethod.

Fees paid on loan facilities are recognised

as the transaction costs of the loan to the

extent that it is probable that some or all of

thefacilitywillbewithdrawn.Inthiscase,

the fee is deferred and recognised in the

statement of net position until the loan is

withdrawn.Totheextentthereisnoevi-

dence that it is probable that some or all

the loans of the facility will be withdrawn,

the fee is capitalised as a prepayment for

liquidity services and amortised over the

periodofthefacility.

2.9 Rental agreements

As a lessee, the Fund has applied the IFRS

16Leasesstandardsince1January2019.

IFRS16specifiestherequirementscon-

cerning recognition, valuation and informa-

tiontobepresentedinthefinancialstate-

ments.Thestandardintroducesasingle

lesseeaccountingmodel.Inprinciple,all

leases with a term of more than one year

are recognised in the balance sheet unless

theunderlyingassetisoflowvalue.Onthe

firstdayofthelease,thelesseerecognises

a liability for its obligation to make lease

payments and an asset item for its right to

usetheasset.Thelesseemustrecognise

the interest expenses on the liability and

theplanneddepreciationontheassetitem.

Inaddition,thelesseemustredefinethe

amount of the lease liability in conjunc-

tion with certain events (such as a change

in the term of the lease or changes to the

leasepaymentsduetoindexadjustments).

The Fund uses the transition relief permit-

ted by IFRS 16 with regard to short-term

leases (with terms of less than 12 months)

andleasesoflow-valueassets.

86Financial statements 2023 Notestothefinancialstatements

3 CRITICAL ACCOUNTING

ESTIMATES AND JUDGEMENTS

Thepreparationoffinancialstatementsin

conformity with IFRS requires the manage-

ment to make estimates and assumptions

that have affected the income, expenses,

assetsandliabilitiespresentedinthefinan-

cialstatements.Judgementisalsoneeded

intheapplicationofaccountingpolicies.

The estimates are based on the best infor-

mationavailableonthereportingdate.The

evaluation is based on both earlier experi-

ence and assumptions about the future that

aremostprobableonthereportingdate.

Actual results may differ from these deci-

sionsbasedonestimatesandassumptions.

Possible changes in estimates are recog-

nised in the period in which the estimate

isadjustedandallsubsequentperiods.The

planning and management of Employment

Fund’sfinancesarelargelybasedonfore-

casts of changes in the unemployment rate,

unemployment expenses, employment rate

andpayroll.Undernormalconditions,the

Fund must set the insurance contributions

atasufficientlevelsothatallprojected

expenses can be covered with the insur-

ancecontributions.Theunemployment

insurance contributions (contribution rates)

are determined for one calendar year at a

time.Whenthecontributionsarechanged,

the employers’ and employees’ contribu-

tionsarechangedbythesamepercentage.

The forecast deviation in the change in net

position between the budget prepared in

Augustintheprecedingyearandthefinan-

cial statements, which are prepared more

thanayearlater,wassignificantlyabove

long-termaveragein2023.

If necessary, the Fund exercises judgement

in applying the valuation methods used in

the measurement of fair value insofar as

the fair values are not received as direct

pricesfromactivemarkets.

Fair value determination of current mon-

ey market investments is based on the

discountedcashflows,andmanagement

has used judgement when it has conclud-

ed that the change of credit risk does not

have a material impact on the change of

fair values of investments due to their short

durationandhighcreditrating.TheFund’s

critical assumptions concerning the future

and key uncertainties in the reporting date

arerelatedtothefactorsmentionedabove.

87Financial statements 2023 Notestothefinancialstatements

Credit losses

Employment Fund applies the IFRS 9

standard model for expected losses when

estimating impairment charges associated

with uncertain unemployment insurance

contributionreceivables.Inthismodel,ex-

pected losses are recognised for the entire

validityperiodofthefinancialasset,and

the model is based on the amount of the

outstanding receivables and the time peri-

odforwhichtheyremainoutstanding.The

parameters applied in the model are based

on an estimate of the amount of unemploy-

ment insurance contribution receivables,

liability component receivables, reconcilia-

tion receivables based on the Employment

ContractsAct,benefitreceivablesandin-

terest receivables to be recognised as credit

lossesonthereportingdate.Expected

credit losses throughout the entire period

of validity are calculated by multiplying

the gross carrying value of the unpaid

receivables by the expected proportion of

loss.Changestoexpectedcreditlossesare

recognisedthroughprofitandloss.

Segment reporting

The IFRS 8 Operating Segments standard

requires entities to disclose information to

enableusersoftheirfinancialstatementsto

evaluatethenatureandfinancialeffectsof

the business operations in which the entity

engages and the economic environments in

whichitoperates.Asdefinedinthestand-

ard, an operating segment is a component

of an entity

A. that engages in activities from which it

may earn revenues and incur expenses

B. whose operating results are regularly

reviewed by the entity’s most senior

executive decision-maker to make deci-

sions about resources to be allocated to

the segment and assess its performance,

and

C. onwhichdiscretefinancialinformation

isavailable.

Further,accordingtothedefinitionofthe

standard, the function of the most senior

executive decision-maker is to allocate

resources to and assess the performance of

theoperatingsegmentsofanentity.

Employment Fund is tasked with collecting

unemployment insurance contributions,

the level of which has been determined by

thepublicauthorities.TheFundpaysthe

collected contributions onwards, mainly to

unemploymentfunds.

Employment Fund uses the collected con-

tributions for conservative investment

activitiesinordertocovercurrentfinancing

contributions.TheFundalsocoversany

deficitsitincurswithloanfinancing.

EmploymentFundisanon-profit,govern-

ment-affiliatedfund.Themanagement

monitors the Fund’s operations as a single

entity, which consists of the contributions

collectedandbenefitspaid,resultingina

changeinnetposition.TheFund’smanage-

ment does not actually allocate resources

to the entity’s activities or review the effec-

tivenessofoperations.

88Financial statements 2023 Notestothefinancialstatements

For these reasons, Employment Fund’s

management has made the assessment

that the presentation of segment informa-

tionisnotappropriate.Presentingsegment

information would not improve the ability

ofareaderofthefinancialstatementsto

assess the Fund’s operations, nature of

theoperatingenvironmentandfinancial

effects.AccordingtoEmploymentFund’s

management, the nature of the Fund’s oper-

ations and operating environment and the

financialimpactsarefairlypresentedinthe

IFRSfinancialstatements.

4 FINANCIAL RISK MANAGEMENT

TheFundseekstolimitfinancialandin-

vestment risks to a level where their real-

isationwillnotresultinsignificantlosses

for the Fund to the extent of creating pres-

sure to increase contributions or endanger

theliquidityoftheFund.Theinvestment

andfinancingactivitiesandrisklimits

of Employment Fund are provided for in

more detail in the investment principles

approved by the Supervisory Board and the

investment plan and debt-management

planapprovedbytheBoardofDirectors.

The market risk of investments is primarily

measured by using the stress-test meth-

od, in which a risk indicator expressed as

annual volatility is assigned to each in-

vestment class on the basis of historical

fluctuationsinvalue.EmploymentFund’s

financialrisksmainlyrelatetoinvest-

ments, and they comprise market risk,

credit and counterparty risk and liquidity

risk.Investmentsarediversifiedinac-

cordance with the investment principles

approved by the Supervisory Board across

variousassetclassessoastoreducefinan-

cialrisks.Risklimitsaresettosuchalevel

that their realisation would not result in the

Fund incurring losses that would give rise

to pressures to increase the level of contri-

butions.TheFundmayenterintoderivative

contractsforhedgingpurposes;however,

derivatives were not used during the peri-

odspresented.

The Fund measures all its investments at

fair value because they have been designat-

edasfinancialassetsatfairvaluethrough

profitandloss.Theinvestmentsareitem-

ised in note 15, along with their fair values

byassetclassandthebasisfordefiningfair

value.

4.1Financial risk factors

Market risk

The main market risk factor for

Employment Fund’s investments and

liabilitiesistheinterestraterisk.The

Fund’s investment portfolio is dominated

byfixed-incomeinvestments(bondsand

moneymarketinvestments).

Employment Fund may make investments

directly, or indirectly through investment

funds.Attheendofthereviewperiod,17%

(31 Dec 2022: 14%) of the investments were

indirect.

89Financial statements 2023 Notestothefinancialstatements

On 31 December 2023 and 31 December 2022, the

market risks for the investments were as follows:

Investment item,

31 Dec 2023

Risk,

per cent

Capital,

EUR thousand

Risk,

EUR thousand

Bank deposits 0.50% 247,468 1,237

Money market 1.00% 572,186 5,722

State and municipal bonds 4.00% 419,124 16,765

Bank bonds 4.50% 289,759 13,039

Corporate bonds 5.00% 249,064 12,453

Equities 25.00% 38,997 9,749

Alternative investments 10.00% 83,333 8,333

Total risk 3.54% 1,899,931 67,298

Investment item,

31 Dec 2022

Risk,

per cent

Capital,

EUR thousand

Risk,

EUR thousand

Bank deposits 0.50% 218,108 1,091

Money market 1.00% 830,516 8,305

State and municipal bonds 4.00% 231,058 9,242

Bank bonds 4.50% 307,430 13,834

Corporate bonds 5.00% 180,450 9,023

Equities 25.00% 36,111 9,028

Alternative investments 10.00% 74,958 7,496

Total risk 3.09% 1,878,632 58,019

Thetotalriskwas3.54%(31Dec2022:3.09%)oftheFund’sassets

and1.9%(31Dec2022:1.7%)oftheFund’sincomein2023.Therisk

posed by the investment portfolio is moderate due to its conserva-

tive structure and moderately low risk level of the securities in the

portfolio.

All money market investments carry variable interest rates (31

Dec2022:100%).Ofthebonds,7%(31Dec2022:8%)wereatvariable

rates.Variable-rateinvestmentsexposetheFundtoacashflow

interestraterisk,whileinvestmentsatfixedratesexposetheFund

toafairvalueinterestraterisk.

If, on 31 December 2023, the Euribor rates and interest rate curve

(swaprates)hadbeen0.5percentagepointshigherwhilealloth-

er variables remained constant, the total change in net position

wouldhavebeenEUR9.8million(31Dec2022:EUR9.4million)

smaller.Respectively,ifon31December2023theEuriborratesand

interestratecurve(swaprates)hadbeen0.5percentagepoints

lower,thetotalchangeinnetpositionwouldhavebeenEUR9.8

million(31Dec2022:EUR9.4million)higher.

90Financial statements 2023 Notestothefinancialstatements

Credit risk

The credit risk of the investments is man-

agedbyissuercreditlimits.Limitsforeach

issuer are determined by taking account

of the absolute size, economic position

andfutureoutlookoftheissuer.TheFund

continuously monitors the credit stand-

ing and future outlook of the issuers, and

when changes occur, the limits are either

increasedordecreased.TheFundmainly

invests in banks in the Nordic countries

that have high credit ratings, states with

strong credit ratings (Finland, Germany, the

Netherlands, Belgium, France, Austria and

Sweden), companies mainly in Finland and

someinSweden,andmunicipalities.Cash

and cash equivalents are only held at banks

withhighcreditratings.

The spread duration of the credit risk in-

cluded in the investments at the end of the

reviewperiodwas1.63years(31Dec2022:

1.28years).

The average credit rating of the investment

portfolio is evaluated on Standard & Poors’

rating scale, which is based on historical

probabilitiesofcreditlosses.Theinvest-

ment portfolio credit rating is estimated to

beapprox.BBB+on31December2023(31

Dec2022:BBB+).

The Fund’s investments mainly consist

of state and bank bonds as well as money

marketinvestments.Theircreditworthi-

ness has been determined using the S&P

creditrating.Mostofthebanksthatthe

Fund has invested in have good credit rat-

ings.However,noteveryregionalbankand

companyhasanofficialcreditrating,so

the credit quality of these entities is deter-

mined using credit ratings received from a

thirdparty.

91Financial statements 2023 Notestothefinancialstatements

ThefollowingtabledescribesEmploymentFund’sfixed-incomeinvestmentsandcredit-

worthinessbygroup.

Investments distributed by the

issuer’s rating

31 Dec 2023,

EUR thousand

31 Dec 2023,

per cent

31 Dec 2022,

EUR thousand

31 Dec 2022,

per cent

AAA 272,696 15.3% 112,814 6.4%

AA+ 250,698 14.1% 130,509 7.4%

AA 13,148 0.7% 7,391 0.4%

AA- 404,829 22.8% 555,907 31.5%

A+ 174,641 9.8% 348,434 19.7%

A 77,990 4.4% 47,589 2.7%

A- 91,922 5.2% 145,574 8.2%

BBB+ 106,350 6.0% 102,284 5.8%

BBB 213,420 12.0% 176,883 10.0%

BBB- 82,110 4.6% 67,250 3.8%

BB+ 29,363 1.7% 40,965 2.3%

BB 9,196 0.5% 4,678 0.3%

BB- 4,959 0.3% 0 0.0%

B+ 0 0.0% 0 0.0%

B 215 0.0% 0 0.0%

B- 0 0.0% 0 0.0%

CCC+ 0 0.0% 0 0.0%

CCC 0 0.0% 0 0.0%

NR 46,061 2.6% 27,280 1.5%

Total 1,777,598 100.0% 1,767,560 100.0%

The amount of Employment Fund’s unem-

ployment insurance contribution receiva-

bles, liability component receivables, ECA

receivables, and interest receivables, are

includedinthecreditrisk.Themostimpor-

tant factor in the realisation of the afore-

mentioned credit risk is related to cases in

which customers liable for paying unem-

ployment insurance contributions become

insolvent (due to bankruptcy, corporate

restructuringordebtrestructuring).

In 2023, the number of corporate restruc-

turings and bankruptcies increased sub-

stantially,comparedto2022.Businesses

declared bankrupt in 2023 included a large

number of construction companies with

wage payments subject to unemployment

insurancecontributions.Thiswasalso

reflectedintheworkloadofEmployment

Fund’s collection activities, which in-

creasedbyabout35%from2022.However,

this has not yet had any corresponding

impact on the effectiveness of the Fund’s

collectionprocess.Especiallyincorpo-

rate restructurings, several years will pass

before it becomes clear whether or not the

paymentplanshavebeenrealistic.The

92Financial statements 2023 Notestothefinancialstatements

actual credit losses on unemployment insurance contributions in

2023totalledEUR4.6(4.0)million.

Liquidity risk

The Fund aims to manage liquidity risk as follows:

1. Liquid realisable investments

2. Short-term loans

3. Maintaining unemployment insurance contributions at a rea-

sonable level and increasing them as necessary

Tosecureitsliquidity,infixed-incomeinvestmentswithlessthan

one year’s maturity, the Fund keeps an amount that covers at least

onemonth’sexpenses.Whentheliquiditybufferdecreasesbelow

this limit, the Fund can also use short-term borrowing to cover the

temporaryliquiditydeficit.Forthispurpose,theFundalsohasa

EUR 300 million commercial paper programme (31 Dec 2022: EUR

300million).Inaddition,theFundalsohasEUR600millionin

committed revolving credit facilities (RCF) with four banks (31 Dec

2022:EUR600million).Thecommercialpaperprogrammeandthe

revolving credit facilities remained unused at the end of 2023 (31

Dec 2022: commercial papers with a value of EUR 100 million were

inuse).

ThefiguresinthetablesareinEURmillion.

Unused committed revolving credit facilities 31 Dec 2023 31 Dec 2022

RCF due in more than one year 600 600

Total 600 600

Unused uncommitted revolving credit facilities 31 Dec 2023 31 Dec 2022

Commercial paper programme 300 200

Total 300 200

Employment Fund has also taken measures to safeguard its debt

financingcapacitybymeansofcreditratings.TheFundhasthe

followingissuercreditratingsasconfirmedbyStandard&Poors(4

July 2023):

• Long-term credit rating AA+, stable outlook

• Short-term credit rating A-1+, stable outlook

EmploymentFundalsosecureditsliquiditythroughdebtfinancing

during2023.Attheendofthereviewperiod,EUR600million

in bonds (31 Dec 2022: EUR 1,200 million) and EUR 0 million in

commercialpapers(31Dec2022:EUR100million)wereinuse.No

short-term bank loans were in use on 31 December 2023 (31 Dec

2022:EUR0million).

93Financial statements 2023 Notestothefinancialstatements

Fixed interest rate periods for loans

Thefixedinterestrateperiodsforloansinthestatementofnetpositionwereaspresentedinthetable.

Loans, 31 Dec 2023

Nominal value EUR

million

Fixed interest rate period

in years Interest rate Due date Credit rating

Bond 2027 600 3.46 0.01% 16 June 2027 AA+

Total 600 3.46

Loans, 31 Dec 2023

Nominal value EUR

million

Fixed interest rate period

in years Interest rate Due date Credit rating

Bond 2023 600 0.46 0.00% 16 June 2023 AA+

Bond 2027 600 4.46 0.01% 16 June 2027 AA+

Commercial papers 100 0.25 -0.05% 1–12 months No rating

Total 1,300 2.28

94Financial statements 2023 Notestothefinancialstatements

Maturities of financial liabilities

ThefollowingtablesshowEmploymentFund’sfinancialliabilitiesbygroupbasedonthematuritiesofoutstandingcontracts.Thefigures

areinEURthousand.

Financial liabilities,

31 Dec 2023

Less than

6 months

6–12

months

1–3

years

4–7

years

Total cash flow

based on contracts

Book value assets(-)/

liabilities

Accounts payable 2,319 0 0 0 2,319 2,319

Loans 60 0 120 600,060 600,240 598,638

Liabilities associated with right-

of-use assets 377 375 1,482 1,446 3,680 3,419

Total 2,756 375 1,602 601,506 606,239 604,376

Financial liabilities,

31 Dec 2022

Less than

6 months

6–12

months

1–3

years

4–7

years

Total cash flow

based on contracts

Book value assets(-)/

liabilities

Accounts payable 881 0 0 0 881 881

Loans 700,060 0 120 600,120 1,300,300 1,298,609

Liabilities associated with right-

of-use assets 346 346 1,372 2,047 4,111 3,588

Total 701,287 346 1,492 602,167 1,305,292 1,303,077

95Financial statements 2023 Notestothefinancialstatements

4.2 Business cycle buffer

Under section 3 of the Act on the Financing of Unemployment

Benefits,EmploymentFundmaintainsabusinesscyclebufferto

ensure liquidity and balance out changes in unemployment in-

surancecontributionsduetoforeseeableeconomicfluctuations

inthenationaleconomy.Whenthedecisiononthelevelofun-

employment insurance contributions is made, the forecast for the

business cycle buffer may by law exceed the maximum amount of

assets over two years during a three-year review period in order to

ensureasteadypaymenttrend.Inthatcase,however,unemploy-

ment insurance contributions may not be set higher than in the

previousyear.Themaximumamountofthebusinesscyclebuffer

iscalculatedonthebasisofthefiguresintheannualfinancial

statements.Theinvestmentoftheassetsaccruedinthebufferis

regulated by the Fund’s investment principles and the investment

planapprovedonanannualbasis.Theuseofdebtfinancingisalso

regulatedbythedebtservicingplan.

The maximum amount of the buffer is calculated by dividing

Employment Fund’s annual expenditure by the average unemploy-

mentratefortheyearandmultiplyingtheresultbysix.Thefol-

lowing table presents the amount of the business cycle buffer and

theminimumandmaximumamountsofthebufferasspecifiedin

theAct.

ThefiguresareinEURmillion.

Business cycle buffer

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Amount 2,021 1,258

Maximum amount 1,861 1,868

Minimum amount -1,861 -1,868

96Financial statements 2023 Notestothefinancialstatements

5 UNEMPLOYMENT INSURANCE CONTRIBUTIONS

ThefiguresareinEURthousand.

Unemployment insurance contributions by

contribution type

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Employer’s unemployment insurance contributions

Employer’s insurance contributions 1,409,566 1,323,956

Training compensation reimbursements -10,244 -8,765

Training compensation settlements paid by

the Ministry of Finance 10,244 8,765

Employer’s insurance contributions, co-owners 2,012 2,021

Total 1,411,578 1,325,977

Employee’s unemployment insurance contributions

Employee’s insurance contributions 1,486,405 1,420,828

Employee’s insurance contributions, co-owners 2,876 2,979

Total 1,489,281 1,423,808

Collection fee income and credit losses

Interest on overdue employer contributions 513 299

Interest on overdue employee contributions 502 330

Collection fee income 439 275

Total 1,455 905

Employer’s liability components and transition security contributions

Liability components 15,637 19,595

Transition security contributions 5,970 0

Accruals -1,188 2,729

Total 20,419 22,324

Unemployment insurance contributions by

contribution type

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Deductions under the Employment Contracts Act (ECA)

Deductions and lay-off income under ECA 915 974

Settlement to the Ministry of Social Affairs and

Health -538 -489

Total 377 484

Contributions from the Ministry of Social Affairs and Health

Earnings-related unemployment allowance 690,817 703,550

Job alternation compensation 10,507 11,012

Equalisation payment for the previous year -1,056 -121

Adulteducationbenefits 4,084 2,892

Total 704,352 717,334

Total unemployment insurance contributions 3,627,462 3,490,831

97Financial statements 2023 Notestothefinancialstatements

6 FINANCING CONTRIBUTIONS PAID

ThefiguresareinEURthousand.

Financing contributions

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Employment Fund contributions paid to unemployment funds

Other earnings-related unemployment

allowance -653,539 -684,505

Additional days of allowance -147,060 -138,902

Transition security allowance -5,037 0

Lay-off allowance -270,200 -191,114

Job alternation compensation -13,358 -14,481

Compensation for administrative

expenses -10,873 -10,732

Equalisation payment for the previous

year 1,615 822

Total -1,098,453

-1,038,912

Government contribution paid to unemployment funds

Other earnings-related unemployment

allowance -676,196 -688,419

Job alternation compensation -10,507 -11,012

Unemployment allowance/

entrepreneurs -6,261 -6,963

Compensation for administrative

expenses -8,360 -8,169

Equalisation payment for the previous

year 1,056 386

Total -700,268

-714,176

Financing contributions

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Finnish Centre for Pensions

Equalisation payment for the previous

year 31,310 36,872

Paymentforthecurrentfinancial

period -631,000 -633,000

Total -599,690 -596,128

State Pension Fund

Equalisation payment for the previous

year 378 505

Paymentforthecurrentfinancial

period -7,942 -8,570

Total -7,564 -8,065

98Financial statements 2023 Notestothefinancialstatements

Financing contributions

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Social Insurance Institution of Finland

Equalisation payment for the previous year 29 1

Basic allowance, additional component, employment

programmeadditionalbenefit -262,910 -242,700

Social Insurance Institution of Finland, transition

security -65 0

Total -262,947

-242,699

Adult education benefits

Scholarshipsforqualifiedemployees -11,827 -11,467

Adult education allowances -189,303 -177,871

Collectionexpensesforbenefits -5 -8

Total -201,135

-189,347

Ministry of Economic Affairs and Employment

Equalisation payment for the previous year 0 0

Paymentforthecurrentfinancialperiod -29,779 -19,786

Transition security from the Development and

AdministrationCentreforELYCentresandTEOffices -381

Total -30,159 -19,786

Member State invoicing for unemployment allowances

Invoiced by Member States -52 -61

Invoiced by the Fund 43 92

Total -9 31

Total financing contributions paid -2,900,224 -2,809,083

99Financial statements 2023 Notestothefinancialstatements

7 ADMINISTRATIVE EXPENSES

ThefiguresareinEURthousand.

Administrative expenses by expense

type

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Personnel expenses

Salaries,bonuses,andbenefits -10,073 -8,474

Pensionexpenses–defined

contribution plans -1,730 -1,494

Socialsecurityexpenses -395 -297

Total -12,198 -10,265

Other administrative expenses

IT expenses -7,798 -3,258

Other personnel expenses -763 -450

Expensesforofficepremises -109 -232

Officeexpenses -1,751 -1,528

Other expenses -8,450 -4,177

Amortisation -2,361 -2,689

Total -21,231 -12,335

Auditor’s fee

Statutory audit -98 -85

Total -98 -85

Total administrative expenses -33,528 -22,685

Number of personnel 31 Dec 2023 31 Dec 2022

Permanent employees 168 151

Fixed-term employees 7 16

Total 175 167

100Financial statements 2023 Notestothefinancialstatements

8 FINANCING COSTS

ThefiguresareinEURthousand.

Financing costs by expense type 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022

Loan financing expenses

Revolving credit facility fees -899 -1,400

Accrued expenses from loans -163 -262

Interest expenses from loans 11 690

Total loan financing expenses -1,051 -972

Interest on the contributions paid to the Finnish

Centre for Pensions -394 2,673

Interest on the contributions paid to the State Pension

Fund 151 106

Total financing costs -1,293 1,806

101Financial statements 2023 Notestothefinancialstatements

9 PROPERTY, PLANT AND EQUIPMENT

ThefiguresareinEURthousand.

Changes in property, plant and equipment IFRS 16 Right-of-use asset Total

Acquisition costs, 1 Jan 2023 3,933 3,933

Additions 498 498

Acquisition costs, 31 Dec 2023 4,431 4,431

Accumulated depreciation, 1 Jan 2023 568 568

Depreciation during the period 653 653

Accumulated depreciation, 31 Dec 2023 1,221 1,221

Book value, 1 Jan 2023 3,365 3,365

Book value, 31 Dec 2023 3,210 3,210

Changes in property, plant and equipment IFRS 16 Right-of-use asset Total

Acquisition costs, 1 Jan 2022 3,735 3,735

Additions 198 198

Acquisition costs, 31 Dec 2022 3,933 3,933

Accumulated depreciation, 1 Jan 2022 0 0

Depreciation during the period 568 568

Accumulated depreciation, 31 Dec 2022 568 568

Carrying value, 1 Jan 2022 3,735 3,735

Carrying value, 31 Dec 2022 3,365 3,365

102Financial statements 2023 Notestothefinancialstatements

10 INTANGIBLE ASSETS

ThefiguresareinEURthousand.

Changes in intangible assets Software Software development expenses Intangible assets in progress* Total

Acquisition costs, 1 Jan 2023 910 13,892 1,088 15,891

Additions 0 0 0 0

Transfers between items 0 1,088 -1,088 0

Acquisition costs, 31 Dec 2023 910 14,981 0 15,891

Accumulated depreciation, 1 Jan

2023 897 12,412 0 13,309

Depreciation during the period 13 1,695 0 1,708

Accumulated depreciation, 31

Dec 2023 910 14,107 0 15,017

Book value, 1 Jan 2023 13 1,479 1,088 2,581

Book value, 31 Dec 2023 0 872 0 872

Changes in intangible assets Software Software development expenses Intangible assets in progress Total

Acquisition costs, 1 Jan 2022 910 13,892 0 14,802

Additions 0 0 1,088 1,088

Transfers between items 0 0 0 0

Acquisition costs, 31 Dec 2022 910 13,892 1,088 15,891

Accumulated depreciation, 1 Jan

2022 856 10,331 0 11,187

Depreciation during the period 41 2,081 0 2,122

Accumulated depreciation, 31

Dec 2022 897 12,412 0 13,309

Book value, 1 Jan 2022 54 3,560 0 3,614

Book value, 31 Dec 2022 13 1,479 1,088 2,581

*Theitem‘Intangibleassetsinprogress’consistsofcapitaliseddevelopmentcosts,givingrisetoaninternallygeneratedintangibleasset.

Therewerenocapitaliseddevelopmentcostsin2023.

103Financial statements 2023 Notestothefinancialstatements

11 RECEIVABLES AND PAYABLES FROM UNEMPLOYMENT INSURANCE CONTRIBUTIONS

ThefiguresareinEURthousand.

Receivables from unemployment insurance contributions 31 Dec 2023 31 Dec 2022

Receivables from employer’s unemployment insurance contribution 13,948 11,768

Receivables from employer’s unemployment insurance contribution, credit loss provision -2,119 -1,856

Receivables from employee’s unemployment insurance contribution 7,774 7,363

Receivables from employee’s unemployment insurance contribution, credit loss provision -4,412 -4,209

Overdue contribution and collection fee receivables 1,377 1,065

Overdue contribution and collection fee receivables, credit loss provision -410 -505

Receivables from unemployment insurance contributions 16,158 13,626

Deferred unemployment insurance contribution receivables 730,652 701,769

Total unemployment insurance contribution receivables 746,810 715,394

Unemployment insurance contribution liabilities 31 Dec 2023 31 Dec 2022

Prepayments 290 401

Refunds 1,154 1,132

Total unemployment insurance contribution liabilities 1,444 1,533

104Financial statements 2023 Notestothefinancialstatements

12 LIFETIME EXPECTED CREDIT LOSSES FROM THE UNEMPLOYMENT INSURANCE CONTRIBUTION

RECEIVABLES AND FROM THE ADULT EDUCATION BENEFITS TO BE RECOVERED (IFRS 9)

ThefiguresareinEURthousand.

Changes in

expected credit

losses

Receivables

from employer’s

unemployment

insurance contribution

Receivables from

employee’s unemployment

insurance contribution

Overdue contribution and

collection fee receivables

for unemployment

insurance contributions

Liability component

and receivables

specified in ECA

Adult education

benefits to be

recovered Total

1 Jan 2023 -1,856 -4,209 -505 -457 -156 -7,183

Change -263 -203 95 186 -65 -250

31 Dec 2023 -2,119 -4,412 -410 -271 -221 -7,433

Changes in

expected credit

losses

Receivables

from employer’s

unemployment insurance

contribution

Receivables from

employee’s unemployment

insurance contribution

Overdue contribution and

collection fee receivables

for unemployment

insurance contributions

Liability component

and receivables

specified in ECA

Adult education

benefits to be

recovered Total

1 Jan 2022 -2,654 -5,442 -600 -297 -139 -9,132

Change 798 1,233 95 -160 -17 1,949

31 Dec 2022 -1,856 -4,209 -505 -457 -156 -7,183

105Financial statements 2023 Notestothefinancialstatements

13 OTHER RECEIVABLES

ThefiguresareinEURthousand.

Current other receivables 31 Dec 2023 31 Dec 2022

Receivables from unemployment funds 28,948 30,995

Transition security receivables 3,080 0

FinnishCentreforPensions,capitalaccruals 0 25,500

FinnishCentreforPensions,compensatoryinterest 11,853 8,211

Education allowance receivables 1,474 1,875

Adulteducationbenefits,creditlossprovision -221 -156

Receivables from the Government related to training compensation 0 3

Employer’s liability component receivables and compensation under the Employment Contracts Act 939 2,302

LiabilitycomponentandreceivablesspecifiedinECA,creditlossprovision -271 -457

Receivables from the State Pension Fund 151 1,343

ReceivablesfromtheMinistryofSocialAffairsandHealth 1,326 292

Receivables from the Social Insurance Institution of Finland 17,514 24,341

Prepayments 776 1,020

Securities in settlement 42,979 20

Taxassets 17 10

Pay security (Ministry of Economic Affairs and Employment) 0 1,049

Total current other receivables 108,567 96,348

106Financial statements 2023 Notestothefinancialstatements

14 NET FAIR VALUE GAINS FROM INVESTMENTS

ThefiguresareinEURthousand.

Types of income and expenses 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022

Dividendincome 2,438 1,753

Gainsondisposals 6,528 5,263

Otherincome 4,381 671

Net interest income 29,859 7,034

Net foreign exchange gains 0 391

Net change in value 36,768 -35,402

Losses on disposals -9,034 -15,667

Other expenses -298 -199

Total net gains on investments 70,642 -36,155

107Financial statements 2023 Notestothefinancialstatements

15 INVESTMENT ASSETS

Investmentsinfinancialassetshavebeendesignatedasfinan-

cialassetsatfairvaluethroughprofitandloss,andaremeasured

atfairvalue.Measurementoftheseassetsisprimarilybasedon

eitherquotedpricesorvaluationsbasedonavailablemarketdata.

Financial instruments carried at fair value have been divided into

three hierarchy levels based on whether they are traded in active

markets, and to what extent the inputs are based on observable

market data, as follows:

Level 1 The valuation is based on quoted prices in active markets

foridenticalfinancialassetsandliabilities.

Level 2 The inputs used in valuations are also based, either directly

or indirectly, on using valuation techniques on observable inputs

otherthanthoseonLevel1.

Level 3 The valuation is based on information other than observa-

blemarketdata.

108Financial statements 2023 Notestothefinancialstatements

Investments by financial instrument class divided into fair value hierarchy levels

Noreclassificationshavebeenmadebetweenthehierarchylevelsduringthefinancialperiod.ThefiguresareinEURthousand.

Financial instrument classes,

31 Dec 2023 Level 1 Level 2 Level 3 Total

State and municipal bonds 419,124 29,828 0 448,952

Bank bonds 279,951 0 0 279,951

Corporate bonds 234,375 0 0 234,375

Investments in funds and equities 177,513 13,810 0 191,323

Mezzanine funds 0 0 829 829

Deposits 0 62,180 0 62,180

Certificatesofdeposit 0 154,908 0 154,908

Municipal papers 0 19,452 0 19,452

Commercial papers 0 177,994 0 177,994

Alternative investments 0 0 82,504 82,504

Total 1,110,963 458,172 83,333 1,652,468

Financial instrument classes,

31 Dec 2022 Level 1 Level 2 Level 3 Total

State and municipal bonds 181,471 49,587 0 231,058

Bank bonds 297,854 0 0 297,854

Corporate bonds 166,536 0 0 166,536

Investments in funds and equities 146,135 13,795 0 159,931

Mezzanine funds 0 0 1,030 1,030

Deposits 0 168,165 0 168,165

Certificatesofdeposit 0 372,754 0 372,754

Municipal papers 0 7,979 0 7,979

Commercial papers 0 181,288 0 181,288

Alternative investments 0 0 73,928 73,928

Total 791,997 793,568 74,958 1,660,524

109Financial statements 2023 Notestothefinancialstatements

ChangesinLevel3financialassetsmeasuredatfairvalue.ThefiguresareinEURthousand.

Financial instrument

classes 1 Jan 2023 Unrealised profit/loss Realised profit/loss Purchases Sales 31 Dec 2023

Mezzanine funds 1,030 218 0 2 -421 829

Alternative investments 73,928 -4,061 51 12,637 -51 82,504

Total 74,958 -3,843 51 12,639 -472 83,333

Financial instrument

classes 1 Jan 2022 Unrealised profit/loss Realised profit/loss Purchases Sales 31 Dec 2022

Mezzanine funds 1,988 -130 0 17 -845 1,030

Alternative investments 40,877 2,312 0 30,739 0 73,928

Total 42,865 2,182 0 30,756 -845 74,958

Deposits,certificatesofdeposit,commer-

cial papers and municipal papers at Level

2 have been valued using the discounted

cashflowmethodbasedontheEuriboror

swap curve and on the forward rate, insofar

as elements of foreign currencies are in-

volved.Basedonthemanagement’sjudge-

ment, the discount factor has been adjusted

for the effect of changes in the credit risk

oftheinvestment.However,theadjustment

hasnothadanymaterialimpact.

InvestmentsclassifiedatLevel 3 are mez-

zanine funds that are valued based on

valuationspreparedbytheissuer.Alter-

nativeinvestmentsareinvestmentfunds.

Investment funds have been measured at

the net asset value of the fund as reported

by the fund manager as of the reporting

date,andtheyhavebeenclassifiedasLevel

1, 2 or 3 assets by their market activity and

marketability.

EquityinvestmentsarequotedontheHel-

sinki Stock Exchange, and they have been

classifiedatLevel1.Theamountofequity

investmentsisminor.Noreclassifications

have been made between levels during the

financialperiod.

110Financial statements 2023 Notestothefinancialstatements

16 CASH AND CASH EQUIVALENTS

ThefiguresareinEURthousand.

Cash and cash equivalents 31 Dec 2023 31 Dec 2022

Bankdeposits 216,479 224,711

Total cash and cash equivalents 216,479 224,711

17 LOANS

ThefiguresareinEURthousand.

Long-term loans 31 Dec 2023 31 Dec 2022

EmploymentFundbonds 598,638 598,205

Total long-term loans 598,638 598,205

Short-term loans 31 Dec 2023 31 Dec 2022

EmploymentFundbonds 0 600,358

Commercialpapers 0 100,046

Total short-term loans 0 700,404

18 OTHER LIABILITIES

ThefiguresareinEURthousand.

Other liabilities 31 Dec 2023 31 Dec 2022

Accounts payable 2,319 881

Accruals 12,574 7,112

Accruals of adult education allowance 18,593 16,290

Accrualsofliabilitycomponentincome 9,668 8,482

FinnishCentreforPensions,capitalaccruals 3,000 0

FinnishCentreforPensions,debitinginterest 11,975 6,299

Ministry of Economic Affairs and Employment, pay

securityaccruals 29,779 20,835

MinistryofSocialAffairsandHealth,liability 0 72,788

ECA Ministry share 540 534

Administrative expense accruals 1,009 439

Liabilities to unemployment funds 8,866 2,641

Holidaypayaccruals 1,378 1,213

Lease liability 3,419 3,588

Adulteducationbenefits,withholdingtaxliability 4,137 3,733

Interest accruals 33 -29

Total other liabilities 107,289 144,805

111Financial statements 2023 Notestothefinancialstatements

19 LIABILITIES AND RECEIVABLES NOT RECOGNISED

IN THE STATEMENT OF NET POSITION

ThefiguresareinEURthousand.

Investment commitments 31 Dec 2023 31 Dec 2022

Committed capital 5,250 5,250

Realised -5,058 -5,056

Total investment commitments 192 194

Investmentfundsacquirecallinvestmentsbasedonthefinancing

needsoftheinvestmentfund.Thecommitmentshavenomaturity

date.

Operating lease commitments

TheFundhasrenteditsofficeandwarehousepremisesandthree

carsonnon-cancellableleasecontracts.Theremainingleasepe-

riods for the cars are 10 months, 2 years and 8 months, and 2 years

and11months.Onthebalancesheetdate,thereare2yearsand3

monthsremainingontheleaseoftheofficeandwarehouseprem-

ises, after which the contract becomes cancellable and subject to

anoticeperiodof9months.Someoftheoffice’spremisescanbe

released by cancelling the respective part of the contract effective

31December2024.TheFundalsohasasubordinatedrighttolease

vacantpremisesunderthetermsoftheleasecontract.

112Financial statements 2023 Notestothefinancialstatements

20 RELATED PARTIES

Related parties of the Fund comprise the Supervisory Board, the

BoardofDirectorsandtheManagementGroup.EmploymentFund’s

Supervisory Board is appointed by the Government on the proposal

ofthelabourmarketparties.TheSupervisoryBoardpreparesthe

proposal for the level of unemployment insurance contributions in

itsautumnmeeting.TheBoardofDirectorsisappointedbytheSu-

pervisoryBoard.TheoperationsofEmploymentFundaresupervised

bytheFinancialSupervisoryAuthority.TheMinistryofSocialAffairs

andHealthalsohastherighttoreceiveinformationabouttheFund’s

operations.

The government contributions payable to the unemployment funds

arereceivedfromtheMinistryofSocialAffairsandHealth.TheFund

regularly pays contributions to the Finnish Centre for Pensions, State

Pension Fund, Social Insurance Institution of Finland and the Minis-

tryofEconomicAffairsandEmployment.

The regulations on related-party transactions set out in the Limited

Liability Companies Act are not applicable to Employment Fund’s op-

erations.However,EmploymentFundcomplieswithIFRSstandards

andguidelinesregardingrelated-partytransactions(IAS24).The

related parties of Employment Fund comprise the members of the

Supervisory Board, members of the Board of Directors, the Managing

Director, the main auditor, the members of the Management Group,

andtheirspouses,trustees,andcontrolledundertakings.Transac-

tions involving related parties are handled in accordance with the

guidelines on related-party transactions approved by the Board of

Directors.Therewerenomajorrelated-partytransactionsin2023.

Thesalaries,bonusesandbenefitspaidtotherelatedpartiesare

summarisedinthetablebelow.ThefiguresareinEURthousand

andtheydonotincludesocialsecuritycontributions.Morede-

tailed breakdowns by each body can be found in the section pre-

sentingEmploymentFund’sremunerationreport.

Fees and other benefits paid to the Board

of Directors and the Supervisory Board

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Salaries,bonuses,andbenefits 158 152

Pensionexpenses–definedcontribution

plans 28 28

Total 185 180

Remuneration of the Management Group

members (excluding the Managing

Director)

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Salaries,bonusesandbenefits 546 568

Pensionexpenses–definedcontribution

plans 97 100

Total 643 668

Managing Director’s salaries and bonuses

1 Jan–31 Dec

2023

1 Jan–31 Dec

2022

Salaries,bonusesandbenefits 188 179

Pensionexpenses–definedcontribution

plans 33 31

Total 221 209

113Financial statements 2023

SIGNATURES ON THE ANNUAL REPORT AND FINANCIAL STATEMENTS

Helsinki27February2024

Pekka Piispanen,

chair

VesaRantahalvari,

vice chair

Tuomas Aarto

Jarkko Eloranta

Minna Etu-Seppälä

RiikkaHeikinheimo

MinnaHelle

Markku Jalonen

Patrizio Lainà

HenrikaNybondas-Kangas

Antti Palola

Saana Siekkinen

HeikkiTaulu

PirjoVäänänen

Janne Metsämäki,

Managing Director

Signatures

114Financial statements 2023

AUDITOR’S STATEMENT

Anauditreporthasbeenprovidedtoday.

Helsinki28February2024

KPMG Oy Ab

Marcus Tötterman

Authorised Public Accountant,

KHT

Auditor’s statement

115Financial statements 2023

Auditor’s report

To the Supervisory Board of Employment Fund

REPORT ON THE AUDIT OF THE

FINANCIAL STATEMENTS

Opinion

Wehaveauditedthefinancialstatementsof

Employment Fund (business identity code

1098099-7)forthefinancialperiod

1January–31December2023.Thefinancial

statements comprise the statement of net

position, the statement of changes in net

positionandstatementofcashflowsand

notes including the material information

ontheaccountingpolicies.

Inouropinionthefinancialstatementsgive

atrueandfairviewoftheFund’sfinan-

cialperformanceandfinancialposition

in accordance with International Finan-

cial Reporting Standards (IFRS) as adopt-

ed by the EU and comply with statutory

requirements.

Our opinion is consistent with the addi-

tional report submitted to the Board of

Directors.

Basis for Opinion

We conducted our audit in accordance with

goodauditingpracticeinFinland.Ourre-

sponsibilities under good auditing practice

are further described in the Auditor’s Re-

sponsibilities for the Audit of the Financial

Statementssectionofourreport.

We are independent of the Fund in accord-

ance with the ethical requirements that

are applicable in Finland and are relevant

toouraudit,andwehavefulfilledourother

ethical responsibilities in accordance with

theserequirements.

We have not provided any non-audit servic-

estotheFund.

We believe that the audit evidence we have

obtainedissufficientandappropriateto

provideabasisforouropinion.

Materiality

Thescopeofourauditwasinfluencedby

ourapplicationofmateriality.Thematerial-

ity is determined based on our professional

judgement and is used to determine the na-

ture, timing and extent of our audit proce-

duresandtoevaluatetheeffectofidentified

misstatementsonthefinancialstatements

asawhole.Thelevelofmaterialitywesetis

based on our assessment of the magnitude

of misstatements that, individually or in

aggregate, could reasonably be expected to

haveinfluenceontheeconomicdecisions

oftheusersofthefinancialstatements.

We have also taken into account misstate-

ments and/or possible misstatements that

in our opinion are material for qualita-

tivereasonsfortheusersofthefinancial

statements.

Auditor’s report

116Financial statements 2023 Auditor’s report

Key Audit Matters

Key audit matters are those matters that, in

our professional judgement, were of most sig-

nificanceinourauditofthefinancialstate-

mentsofthecurrentperiod.Thesematters

were addressed in the context of our audit of

thefinancialstatementsasawhole,andin

forming our opinion thereon, and we do not

provideaseparateopiniononthesematters.

Thesignificantrisksofmaterialmisstate-

ment referred to in point (c) of Article 10(2)

of EU Regulation No 537/2014 are included in

thedescriptionofkeyauditmattersbelow.

We have also addressed the risk of man-

agementoverrideofinternalcontrols.This

includes consideration of whether there was

evidence of management bias that repre-

sented a risk of material misstatement due to

fraud.

Key audit matters How the matter was addressed in the audit

Determination and collection of unemployment insurance contributions (accounting policies and note 5 to

the financial statements)

• The determination and collection of unemploy-

ment insurance contributions by Employment

Fundisbasedonlegislation.Theunemployment

insurance contributions which have been pre-

sented in the statement of changes in net position

fortheyear2023,amountedtoEUR3.6billion.

• The unemployment insurance contributions must

be determined in such a way so that Employment

Fund is able to meet the obligations being respon-

siblefor.Unemploymentinsurancecontributions

are determined once per calendar year, in the

precedingyear.

• Employment Fund determines the contribution

amounts and makes the prepayment decisions,

and collects the prepayments based on the

contribution rates approved by Parliament and

payroll data reported by employers to the Incomes

• Employment Fund monitors defaults concerning

the obligation to pay unemployment insurance

contributions.

• As the amount of unemployment insurance

contributionsissignificantinthefinancialstate-

ments and the determination and collection of the

contributions is subject to legal requirements, it

hasbeenidentifiedasakeyauditmatter.

• Our audit has included assessing the process to

determine the unemployment insurance contribu-

tionsandevaluatingthecontrolenvironment.

• We have evaluated the process of invoicing, col-

lecting and managing unemployment insurance

contributions and have performed substantive

testingonchainsoftransactions.

• We have assessed and tested the controls for

determining and receiving contributions and for

monitoringofpaymentsreceived.

• Wehaveverifiedthecorrectnessoftherelevant

contribution rates applied in Employment Fund’s

systemenvironment.

• In addition, we have familiarised ourselves

with the methods for accruing unemployment

insurance contributions in accordance with the

accruals principle and accounting for impairment

ofunemploymentinsurancereceivables.

• The audit has also included testing of the controls

inplaceovertheflowofkeydata,changeman-

agement and the transfer of information between

systems.

117Financial statements 2023 Auditor’s report

Responsibilities of the Board of Directors

and the Managing Director for the Financial

Statements

The Board of Directors and the Managing

Director are responsible for the preparation

ofconsolidatedfinancialstatementsthat

give a true and fair view in accordance with

International Financial Reporting Stand-

ards (IFRS) as adopted by the EU, and of

financialstatementsthatgiveatrueand

fair view in accordance with the laws and

regulations governing the preparation of

financialstatementsinFinlandandcomply

withstatutoryrequirements.TheBoardof

Directors and the Managing Director are al-

so responsible for such internal control as

they determine is necessary to enable the

preparationoffinancialstatementsthatare

free from material misstatement, whether

duetofraudorerror.

Inpreparingthefinancialstatements,the

Board of Directors and the Managing Direc-

tor are responsible for assessing the Fund’s

ability to continue as a going concern,

disclosing, as applicable, matters relat-

ing to going concern and using the going

concernbasisofaccounting.Thefinancial

statements are prepared using the going

concern basis of accounting unless there is

an intention to liquidate the Fund or cease

operations, or there is no realistic alterna-

tivebuttodoso.

Auditor’s Responsibilities for the Audit of

the Financial Statements

Our objectives are to obtain reasonable

assuranceaboutwhetherthefinancial

statements as a whole are free from mate-

rial misstatement, whether due to fraud or

error, and to issue an auditor’s report that

includesouropinion.Reasonableassur-

ance is a high level of assurance, but it is

not a guarantee that an audit conducted

in accordance with good auditing practice

will always detect a material misstatement

whenitexists.Misstatementscanarise

from fraud or error and are considered

material if, individually or in the aggregate,

theycouldreasonablybeexpectedtoinflu-

ence the economic decisions of users taken

onthebasisofthefinancialstatements.

As part of an audit in accordance with good

auditing practice, we exercise professional

judgement and maintain professional scep-

ticismthroughouttheaudit.Wealso:

• Identify and assess the risks of

materialmisstatementofthefinancial

statements, whether due to fraud

or error, design and perform audit

procedures responsive to those risks,

and obtain audit evidence that is

sufficientandappropriatetoprovide

abasisforouropinion.Theriskofnot

detecting a material misstatement

resulting from fraud is higher than for

one resulting from error, as fraud may

involve collusion, forgery, intentional

omissions, misrepresentations, or the

overrideofinternalcontrol.

• Obtain an understanding of internal

control relevant to the audit in order

to design audit procedures that are

appropriate in the circumstances but

not for the purpose of expressing an

opinion on the effectiveness of the

Fund’sinternalcontrol.

118Financial statements 2023 Auditor’s report

• Evaluate the appropriateness of the

accounting policies used and the

reasonableness of accounting estimates

and related disclosures made by

management.

• Conclude on the appropriateness of the

Board of Directors’ and the Managing

Director’s use of the going concern

basis of accounting and based on the

audit evidence obtained, whether a

material uncertainty exists related

to events or conditions that may cast

significantdoubtontheFund’sability

tocontinueasagoingconcern.Ifwe

conclude that a material uncertainty

exists, we are required to draw attention

in our auditor’s report to the related

disclosuresinthefinancialstatements

or, if such disclosures are inadequate, to

modifyouropinion.Ourconclusionsare

based on the audit evidence obtained

uptothedateofourauditor’sreport.

However,futureeventsorconditions

may cause the Fund to cease to

continueasagoingconcern.

• Evaluate the overall presentation,

structureandcontentofthefinancial

statements, including the disclosures,

andwhetherthefinancialstatements

represent the underlying transactions

andeventssothatthefinancial

statementsgiveatrueandfairview.

We communicate with those charged with

governance regarding, among other mat-

ters, the planned scope and timing of the

auditandsignificantauditfindings,includ-

inganysignificantdeficienciesininternal

controlthatweidentifyduringouraudit.

We also provide those charged with govern-

ance with a statement that we have com-

plied with relevant ethical requirements

regarding independence, and communicate

with them all relationships and other mat-

ters that may reasonably be thought to bear

on our independence, and where applica-

ble,relatedsafeguards.

From the matters communicated with

those charged with governance, we de-

termine those matters that were of most

significanceintheauditofthefinancial

statements of the current period and are

thereforethekeyauditmatters.Wede-

scribe these matters in our auditor’s report

unless law or regulation precludes public

disclosure about the matter or when, in ex-

tremely rare circumstances, we determine

that a matter should not be communicated

in our report because the adverse conse-

quences of doing so would reasonably be

expected to outweigh the public interest

benefitsofsuchcommunication.

119Financial statements 2023 Auditor’s report

Other Reporting Requirements

Information on our audit engagement

Employment Fund was established in 2019

and became a public interest entity during

2020.WehavebeentheFund’sauditors

sinceitsestablishment.

Other Information

The Board of Directors and the Managing

Director are responsible for the other infor-

mation.Theotherinformationcomprises

the report of the Board of Directors and the

information included in the Annual Report

butdoesnotincludethefinancialstate-

mentsandourauditor’sreportthereon.

Ouropiniononthefinancialstatements

doesnotcovertheotherinformation.

Inconnectionwithourauditofthefinan-

cial statements, our responsibility is to

read the other information and, in doing so,

consider whether the other information is

materiallyinconsistentwiththefinancial

statements or our knowledge obtained in

the audit, or otherwise appears to be mate-

riallymisstated.Withrespecttothereport

of the Board of Directors, our responsibil-

ity also includes considering whether the

report of the Board of Directors has been

prepared in accordance with the applicable

lawsandregulations.

In our opinion, the information in the re-

port of the Board of Directors is consistent

withtheinformationinthefinancialstate-

ments and the report of the Board of Direc-

tors has been prepared in accordance with

theapplicablelawsandregulations.

If, based on the work we have performed,

we conclude that there is a material mis-

statement of the other information, we are

requiredtoreportthatfact.Wehavenoth-

ingtoreportinthisregard.

Helsinki 28 February 2024

KPMG OY AB

Marcus Tötterman

AuthorisedPublicAccountant,KHT