Spousal Life Conference : Annexe 5
The Special Compensation Scheme For Spouses of Finnish Foreign Service Officers
Finnish society is based on the assumption that everyone has a job and therefore earns their own pension. The majority of Foreign Service Officers' Spouses are unable to do achieve this goal.
The Finnish Foreign Service Spouses' Association was founded in 1968 with the chief aim to improve the situation of the spouses. In 1978 a pension-committee was founded and after a long and at times acrimonious struggle a law was passed in 1989. The amounts of money agreed upon at the time were very small, but in principle a big step had been take. Since the law was not considered appropriate in all its aspects, a new law was passed in 1991.
This law (1384/91) states that all spouses who before the age of 65 have accompanied their Foreign Affairs spouses on postings abroad are entitled to a pension. This pension is calculated according to the total number of months spent on foreign postings and is payable at the age of 65. If both spouses happen to be working on postings abroad, the law is not applicable. Furthermore, any other pensions the spouse might have are not affected by this pension. It is, however, subject to a tax of 22.5%. The pension is personal and is lost in cases of divorce.
The pension fund accumulates at a rate of 121.57 FMK and is adjusted annually with a index coefficient. * A clarification concerning terminology is in order at this stage. The scheme is officially not a pension but a special compensation. This need for this distinction becomes clear in the context of the index coefficient. At the moment authorities have locked the special compensation to the normal pension index coefficient. We are attempting to distance it from pensions, thereby allowing for bigger adjustments to be made, as the sum is too small at the moment. So far we have had no success.
An example to illustrate the impact of this law:
The spouse has accompanied the Foreign Service Officer abroad for a total of I5 years = 180 months. 180 months x 121.57 FMK = 21882.6 per annum =1823.55 per month
The spouse will then receive the sum of 1823.55 FMK, minus 22.5% tax, on reaching
retirement age, 65 years. FMK 3.34= CAD $1.00