Automated decision-making

Decision

Grounds for the decision

List of documents on which the decision to adopt is based

Date of adoption and date of decision

Information about the decision-maker

Contact information for Ilmarinen Mutual Pension Insurance Company for more information on the use of the automatic decision procedure

Information

Applicable provisions

In this decision, Ilmarinen Mutual Pension Insurance Company has assessed the requirements for deploying an automated decision-making procedure for changing an entrepreneur’s YEL income.

Ilmarinen Mutual Pension Insurance Company makes decisions concerning changing entrepreneurs’ YEL income either based on an entrepreneur’s application or due to the provisions of the Self-Employed Persons’ Pensions Act (1272/2006) and the provision on the entry into force of the act amending it (1157/2022) that Ilmarinen is obligated to comply with.

Provisions concerning entrepreneurs’ YEL income and changing an entrepreneur’s YEL income are laid down in sections 112 and 112a of the Self-employed Persons’ Pensions Act (YEL, 1272/2006) and in the provision on the entry into force of the act amending it (1157/2022).

Decision

Ilmarinen Mutual Pension Insurance Company will deploy an automated decision-making procedure for changing the entrepreneur’s YEL income.

Grounds for the decision

According to section 53e, subsection 2, of the Administrative Procedure Act (434/2003), an authority can use automated decision-making in a matter that does not involve facts requiring case-by-case consideration or which involves facts requiring case-by-case consideration that have been assessed by an official or another processor in the matter. The decision-making must be based on the processing rules drawn up on the basis of applicable law and prior consideration as referred to in section 2, subsection 16, of the Act on Information Management in Public Administration (906/2019).

Ilmarinen Mutual Pension Insurance Company’s automated decision-making procedure in decisions concerning changing an entrepreneur’s YEL income is based on pre-established processing rules.

Based on Section 112, subsections 1 and 2, of the Self-employed Persons’ Pensions Act, when an entrepreneur’s insurance begins, Ilmarinen Mutual Pension Insurance Company confirms for the entrepreneur an annual YEL income that corresponds to their work contribution. YEL income is the salary that would reasonably be paid if a person with the same professional skills were hired to carry out the self-employed person’s work, or compensation that can otherwise be considered to correspond on average to such work. YEL income is confirmed on the basis of an overall assessment. When confirming YEL income, Ilmarinen Mutual Pension Insurance Company considers the median salary of full-time workers in the relevant private-sector industry as the salary and compensation referred to above, and takes into account other information describing the amount of the entrepreneur’s work contribution, the scope of the entrepreneurial activities, the entrepreneur’s professional skills and the value of the entrepreneur’s work contribution.

By virtue of section 2, subsection 1, paragraph 6, of the Act on the Finnish Centre for Pensions, the Finnish Centre for Pensions has issued recommendations on confirming an Entrepreneur’s YEL income, changing an Entrepreneur’s confirmed YEL income and an Entrepreneur’s total YEL income. Based on section 2, subsection 1, paragraph 8, of the Act on the Finnish Centre for Pensions, the Finnish Centre for Pensions additionally maintains and develops the database required for determining the YEL income as referred to in section 112, subsection 2, of the Self-employed Persons’ Pensions Act, to support the recommendations referred to in paragraph 6.

Based on the act governing it, the Finnish Centre for Pensions maintains the database required for determining YEL income in the industry’s calculation service (database required for determining YEL income). The calculation service gives the entrepreneur a YEL income recommendation that aims to match the estimate of the value of the entrepreneur’s work contribution based on a model created on the basis of statistical data and application practice. With the help of the YEL income recommendation calculation service, the YEL income of entrepreneurs pursuing entrepreneurial activities of a specific scale in a specific industry is defined according to uniform criteria in all pension institutions.

Ilmarinen Mutual Pension Insurance Company has assessed that for cases in which an entrepreneur applies for confirmation of YEL income that deviates from the upper or lower limits of the Finnish Centre for Pensions’ recommended YEL income, case-by-case consideration is required. 

Cases in which an entrepreneur seeks confirmation of YEL income that is within the upper and lower limits of the Finnish Centre for Pension’s recommended YEL income thus do not require case-by-case consideration.

Decisions issued in Ilmarinen Mutual Pension Insurance Company’s automated decision-making procedure are justified as required by section 95a of the Self-employed Persons’ Pensions Act, meaning our company’s decisions on confirming YEL income include data used as the basis for confirming YEL income. The entrepreneur will receive Appeal Instructions (i.e. administrative review) attached to decisions. There is no cost for requesting an administrative review, and the request is examined by a natural person, meaning the entrepreneur’s request for a review or a comparable request is not resolved automatically. The consideration of administrative reviews thus fulfils the requirements of section 53e, subsection 4, of the Administrative Procedure Act (434/2003).

List of the documents serving as the basis for the deployment decision

1. Documentation on procedures and processing rules for YEL income changes, division of duties related to the obligations laid down in Chapter 6a of the Information Management Act
2. Requirements for deployment and applied provisions
3. Key quality assurance measures
4. Procedural guidelines for information security and data protection.

Date of deployment and date when the decision was made

The decision was made on 9 June 2023.
The date of deployment is 16 June 2023.

Information on the decision-maker

The decision on the deployment of an automated decision-making procedure concerning decisions on changing an entrepreneur’s YEL income was made by Ilmarinen Mutual Pension Insurance Company’s insurance and pension services line’s executive group, which is headed by Executive Vice President of Insurance and Pension Services Tiina Nurmi.

Ilmarinen Mutual Pension Insurance Company’s contact details for additional information on the use of an automated decision-making procedure

For more information, please contact Minna Hakkarainen, Director of Insurance Services, tel. 010 284 11 (switchboard) email minna.hakkarainen@ilmarinen.fi.

Communication

This decision is publicly available on Ilmarinen Mutual Pension Insurance Company’s website, ilmarinen.fi.

Applied provisions

• Administrative Procedure Act (434/2003)
• Act on Information Management in Public Administration (906/2019)
• Self-employed Persons’ Pensions Act (Yrittäjän eläkelaki 1272/2006)
• Act on the Finnish Centre for Pensions (Laki Eläketurvakeskuksesta 397/2006).

Decision

Grounds for the decision

List of documents on which the decision to adopt is based

Date of adoption and date of decision

Information about the decision-maker

Contact information for Ilmarinen Mutual Pension Insurance Company for more information on the use of the automatic decision procedure

Information

Applicable provisions

With this decision, Ilmarinen Mutual Pension Insurance Company has assessed the conditions for the introduction of an automatic decision procedure for the granting of partial early old-age pension or old-age pension. 

The employee is entitled to retire on an old-age pension from the beginning of the month following the month during which the employee has reached the earliest eligibility age for old-age pension. An employee's right to an old-age pension is laid down in section 11 of the Employees Pensions Act (395/2006). 

According to section 13, subsection 3 of the Employees Pensions Act, the earnings from employment relationship that begins during old-age pension and other situation than those referred to in section 12, subsection 2, the pension accrued from earnings paid during old-age pension is granted on application at the earliest from the beginning of the calendar month following a month in which the employee reaches the upper age limit for insurance obligation.

According to section 13, subsections 1 and 2 of the Employees Pensions Act, an old-age pension may be granted retroactively, although, unless a valid reason exists, for no more than three months preceding the pension application month.

A self-employed person is entitled to retire on an old-age pension from the beginning of the month following the birthday marking the earliest eligibility age for old-age pension. A self-employed person is entitled to an old-age pension regardless of whether they continue their self-employment activity referred to in the Self-Employed Persons´ Pensions Act. A self-employed person's right to an old-age pension is laid down in section 8 of the Self-Employed Persons´ Pensions Act (1272/2006). 

According to section 10 of the Self-Employed Persons´ Pensions Act, an old-age pension may also be granted retroactively for a maximum of three months preceding the month of application for the pension or for a longer period for a valid reason. For the pension to be granted retroactively, the self-employed person's insurance under the Self-Employed Persons´ Pensions Act must have ended before the pension starts.

According to section 10, subsection 2 of the Self-Employed Persons´ Pensions Act, pension accrued during the period of old-age pension from self-employment activity insured under section 113 of the Self-Employed Persons´ Pensions Act (i.e. the self-employed person has exercised their right to take out YEL insurance while on an old-age pension under earnings-related pension acts) is granted on application at the earliest from the beginning of the calendar month following the reaching of upper age limit for insurance obligation.

An employee is entitled to retire on a partial early old-age pension from the beginning of the month following the month during which the employee has reached the earliest eligibility age for partial early old-age pension, determined according to the birth year. Employee's right to partial early old-age pension is laid down in section 15 of the Employees Pensions Act.

According to section 13, subsection 5 of the Employees Pensions Act, if an employee has received partial early old-age pension, the old-age pension starts at the earliest at the beginning of the calendar month following the month in which the employee has fulfilled the conditions laid down in section 11 of the Employees Pensions Act and has finished their main work insured under earnings-related pension acts.

A self-employed person has the right to retire on a partial early old-age pension from the beginning of the month following the month of the birthday marking the earliest eligibility age, determined according to the birth year. A self-employed person's right to a partial early old-age pension is laid down in section 12 of the Self-Employed Persons´ Pensions Act. 

According to section 10, subsection 3 of the Self-Employed Persons´ Pensions Act, if a self-employed person has received a partial early old-age pension, the old-age pension starts at the beginning of the calendar month following the month in which the self-employed person has fulfilled the conditions laid down in section 8 of the Self-Employed Persons´ Pensions Act and has finished their main work insured under earnings-related pension acts.

The old-age pension or partial early old-age pension for employees and self-employed persons is granted on application by the pension claimant. The pension application procedure is provided for in section 101 of the Employees Pensions Act and section 91 of the Self-Employed Persons´ Pensions Act. 

The conversion of an employee's disability pension into an old-age pension is provided for in section 52 of the Employees Pensions Act (395/2006) and in section 49 of the Self-Employed Persons´ Pensions Act (1272/2006). 

Decision

Ilmarinen Mutual Pension Insurance Company will introduce an automatic decision procedure for granting an employee's or self-employed person's old-age pension or partial early old-age pension if the old-age pension is not granted retroactively for a period longer than three months prior to the month of application for the pension. Partial early old-age pension is not granted retroactively.

Grounds for the decision

According to section 53e, subsection 2 of the Administrative Procedure Act (434/2003), an authority can automatically decide on a matter that does not contain facts that require case-by-case consideration or a matter which contains facts that require case-by-case consideration that have been assessed by an official or another processor in the matter. The decision-making must be based on the processing rules drawn up on the basis of applicable law and prior consideration as referred to in section 2, point 16 of the Act on Information Management in Public Administration (906/2019)..
 
Ilmarinen Mutual Pension Insurance Company issues a pension entitlement decision to a person applying for an old-age pension or partial early old-age pension.

To be entitled to an old-age pension or partial early old-age pension, an employee or self-employed person must have reached the statutory retirement age.
  
According to section 13 of the Employees Pensions Act, an employee's old-age pension starts at the beginning of the calendar month following the month during which the employee has reached the earliest eligibility age for old-age pension and has finished the work on the basis of which he or she is applying for old-age pension. An old-age pension may be granted retroactively, although, unless a valid reason exists, for no more than three months preceding the pension application month.

According to section 6, subsection 3, point 1 of the Income Information System Act (53/2018), an employer must enter information on the termination of the employment relationship in the incomes information system maintained by the Tax Administration's Income Register Unit when the employment relationship is terminated on the basis of retirement.

According to section 12 of the Employees Pensions Act, earnings from employment paid during the month in which the first old-age pension, granted under the said act, commences, are taken into account in determining the amount of the old-age pension from its commencement. This employment must have ended before the commencement of the said old-age pension. 

Mutual Pension Insurance Company Ilmarinen issues a decision on the old-age pension to the employee by automatic decision-making, first by a provisional decision which takes into account the earnings paid up to the month of the start of the pension as pensionable earnings. There is no right of appeal against this provisional decision. Ilmarinen issues to the employee a final decision on the old-age pension immediately after the earnings for the month in which the old-age pension starts and the date on which the employment relationship ends have been entered by the employer in the incomes information system. 

According to section 12 of the Income Information System Act, the employer must, as a rule, submit the information to the incomes information system no later than the fifth calendar day after the payment date. 

If the employee's employment relationship ended before the application for an old-age pension was submitted, as for example in situations where the employee has received unemployment benefits before applying for an old-age pension, Ilmarinen issue a final decision on the old-age pension immediately. 

According to section 10 of the Self-Employed Persons´ Pensions Act, the old-age pension starts at the beginning of the calendar month following the calendar month in which the self-employed person reached the age of entitlement to an old-age pension and in which the pension was applied for. An old-age pension may also be granted retroactively for a maximum of three months preceding the month of application for the pension or for a longer period for a valid reason. For the pension to be granted retroactively, the self-employed person's YEL insurance must have ended before the pension starts.

An employee's or self-employed person's partial early old-age pension starts from the beginning of the calendar month following the pension application month or from a later date declared by the applicant (section 17 of the Employees' Pensions Act and section 14 of the Self-Employed Persons´ Pensions Act). Partial early old-age pension is not granted retroactively. 

Ilmarinen grants a partial early old-age pension by automatic decision-making from the date applied for and the pension share applied for (25% or 50% of the pension on which the partial early old-age pension is based).

The pension share is provided for in section 16 of the Employees Pensions Act and section 13 of the Self-Employed Persons´ Pensions Act. 

An employee's or self-employed person's old-age pension is not granted by automatic decision-making if the old-age pension is claimed retroactively for a period longer than three months preceding the month in which the pension is claimed, as the decision-making in these situations requires case-by-case consideration. 

Case-by-case consideration is not required in matters where the employee or self-employed person applies for an old-age pension or partial early old-age pension from or after the minimum retirement age prescribed by law, and the other conditions for granting a pension set out in law can be verified either from the information submitted to the joint earnings- and accrual register of the earnings-related pension field from the incomes information system maintained by the Tax Administration's Income Register Unit or otherwise from the earnings- and accrual register (such as a period of unemployment benefit prior to the old-age pension). 

Decision-making issued by Ilmarinen Mutual Pension Insurance Company in the automatic decision procedure are justified pursuant to section 45, subsection 2, point 4 of the Administrative Procedure Act, i.e. the reasons for the decision may be omitted if, by the decision, a claim is accepted that does not concern another party and no other party has a right to appeal against the decision. An employee or self-employed person receives appeal instructions attached to the final decision on old-age pension and partial early old-age pension, the appeal is free of charge and the appeal by the employee or self-employed person is examined by a natural person, i.e. the appeal or comparable claim is not automatically resolved. The handling of appeals therefore meets the requirements of section 53e, subsection 4 of the Administrative Procedure Act (434/2003).

List of documents on which the decision to adopt is based

1. Documentation of the procedures and processing rules for granting an employee's or self-employed person's old-age pension or partial early old-age pension, division of tasks related to the obligations under chapter 6a of the Act on Information Management in Public Administration
2. Conditions for adoption and applicable provisions
3. Key quality assurance measures 
4. Procedural guidelines for data security and data protection

Date of adoption and date of decision

The date of the decision is 12 September 2024

The date of adoption is 12 October 2024.

The automatic decision procedure was adopted before the entry into force of the Act amending the Act on Information Management in Public Administration (488/2023). 

Information about the decision-maker

The decision on the automatic decision-making procedure for granting an employee’s or self-employed person’s old-age pension has been made by the leadership team of the Insurance and Pension Services department of Ilmarinen Mutual Pension Insurance Company, chaired by Tiina Nurmi, Executive Vice President, Insurance and Pension Services 

Contact information for Ilmarinen Mutual Pension Insurance Company for more information on the use of the automatic decision procedure

For further information, please contact Outi Pekkarinen, Senior Vice President, Pension Services, tel. +358 10 284 11 (switchboard), e-mail outi.pekkarinen@ilmarinen.fi 

Information

This decision is publicly available on the Ilmarinen Mutual Pension Insurance Company website ilmarinen.fi

Applicable provisions

Administrative Procedure Act (434/2003) 
Act on Information Management in Public Administration (906/2019)
Act amending the Act on Information Management in Public Administration (488/2023)
Employees Pensions Act (395/2006)
Self-employed Persons’ Pensions Act (1272/2006)