Employers Leave Fund Supervisory Board in Protest
Employers have decided to quit the Unemployment Insurance Fund and Health Insurance Fund supervisory board in protest against the government's plans to merge the reserves with the state treasury, a move expected to be approved by Parliament in coming weeks.
Social Affairs Minister Hanno Pevkur called the November 23 decision by the employers "recalcitrance." "Uncooperative behavior and issuing ultimatums is not a reasonable way to seek a proper compromise," said Pevkur.
Providing a counterweight to the state, union and employer representatives sit on the supervisory boards of the two funds.
Parliamentary Finance Committee chairman Sven Sester downplayed the significance of the reserves of the funds coming directly under cabinet control, saying that it is largely an accounting issue.
"I don't see any reasons nor, for all intents and purposes, any fear of sweeping changes," he said. "I will say again that the funds that are consolidated in the reserves of the Unemployment Insurance Fund and Health Insurance Fund are in this sense safe. The state treasury's ratings are higher than those of the funds."
But the opposition and unions say the transition decreases the independence of the organizations.
"These funds have a specific purpose and the knowledge that they may not be used for other purposes. This is definitely more convenient for the Ministry of Finance but not for the funds," said Social Democrat Eiki Nestor, a member of the Finance Committee.
Union boss Harri Taliga says amassing and managing the reserves and the approval of the unemployment insurance premium's annual rate are policy instruments that the supervisory board uses to oversee the funds.
"If the Fund lacks the competence to decide all matters that pertain to it […] then essentially the Fund's trilateral management has no point as there is no substantive decision-making authority," said Taliga.
The Fund's supervisory board has proposed that if the ministry does not drop its demand for control over the reserves, the premium must be reduced from 4.2 percent to 3 percent, but the Ministry of Finance has opposed this.
The Cabinet will discuss the new premium rate today. It must be approved by December 1, but the consent of the Fund's supervisory board is required.
Meanwhile, the third reading in Parliament on bringing the reserves under treasury control is expected in the second week of December.
Kristopher Rikken