In addition to employment pension security, MELA is responsible for the statutory accident insurance of agricultural entrepreneurs and e.g. for the holiday stand-in system of agricultural entrepreneurs.

Relation to other employment pension system and accident insurance

The Finnish social security system is based on two statutory schemes: the national pension scheme providing a minimum security and the earnings-related employment pension system. The employment pension system is based on the fact that the labour input of both wage earners and entrepreneurs is insured in adherence with the same principles, and also the benefits are alike.

A system based on two statutory schemes

The social security provided by the Social Insurance Institution (KELA) guarantees a minimum security to everyone living in Finland. In addition to basic pension security it covers many other forms of benefits such as general treatment of illnesses, family benefits, basic unemployment security and many other benefits related to housing and basic livelihood. The earnings-related employment pension security system covers all persons working as wage-earners or entrepreneurs, and through the system the insured accumulate earnings-related old age, disability, and family pension security.

The earnings-related pension security system of agricultural entrepreneurs is very similar to the system of wage-earners and other entrepreneurs. The major exceptions are the following :

• The agricultural entrepreneurs' separate early retirement pension system;
• The agricultural entrepreneurs' obligatory accident insurance system which for other entrepreneurs is based on optional insurance;
• The insurance premium system based on which agricultural entrepreneurs, on lower earned income levels, pay a lower premium than others working as entrepreneurs. 

A system settled through trilateral negociations

The key content of the Finnish employment pension system is often settled through trilateral negotiations between the labour market organisations and the government of the country. This is to ensure that possible implemented changes gain a wide acceptance among the different parties.

Centralised pension security

In addition to agricultural entrepreneurs, MELA insures reindeer breeders, fishers and entrepreneurs carrying on forestry. The insurance covers also other business operations carried on in connection with farms. Insurance conditions are stipulated in the Farmers' Pensions Act. The accident insurance, early retirement system and holiday stand-in system of agricultural entrepreneurs are also governed by separate laws.

The structural change of agriculture has been quite strong in Finland. MELA insures 90,000 entrepreneurs (= 60,000 farms) and there are almost 180,000 beneficiaries. The rapid structural change is expected to continue long into the future.

The high number of beneficiaries in relation to the insured means in practice that the government must participate in the costs of the system with a significant contribution. In addition to this, the social politics of agriculture has also been part of the incomes policy system of agriculture, and the significance of this has not reduced during the EU membership of Finland.

MELA is an employment pension company established by virtue of law, which is exceptional in the Finnish decentralised employment pension insurance system. Due to this special status and the significant share of government funding, representatives of the government have an important role in MELA's administration; the Ministry of Social Affairs and Health, the Ministry of Agriculture and the Ministry of Finance are represented in the board of directors. Representatives of the insured have a majority in the board of directors, as well as the delegation of MELA.

MELA’s legislative status is strongly based on the idea that the operation can be organised more cost-effectively through one company. In this goal MELA has been very successful, as the annual operation costs are, on an estimate, only half of the average operation costs for running the employment pension system of other entrepreneurs.

An efficient local network of agents

In addition to the head office, MELA has a regional network of agents that largely handles the practical customer service. From the start of 2006 there have been 67 agency regions and more than 300 local receptions. In the future MELA will lay a strong focus on the development of electronic service channels (Internet and phone services).