The State Pension Fund was established at the beginning of 1990 as the result of the incomes policy negotiation process.
The State Pension Fund started its operation in early 1990.
The State Pension Fund is a fund operating outside the Budget in accordance with the act on the State Pension Fund.
The purpose of the State Pension Fund is to prepare for the payment of future pensions by the government and to balance the costs of the pension system. Its task is to accumulate funds that can be used to balance the expenses of the pensions paid to baby boomers in the coming years when the expected pension expenditure is the highest.
The fund is managed by the State Treasury. The fund’s board of directors, appointed by the Ministry of Finance, decides on the investment principles of the fund and is in charge of the fund.
4 January 1991 the State Treasury’s internal newsletter Sinetti 1/91 (74k, pdf) was first published.
Quality is included in the annual performance agreement of each profit centre at the State Treasury. This means that quality is constantly being monitored as a performance indicator. The systematic development of quality work was started in 1992, organised in all units in 1994 and implemented in 1995.
The systematic development of quality work was started in 1992.
Once a year, each profit centre performs a self-assessment of quality for the operations of their own unit, and the extended board of directors does the same for the entire agency. The first self-assessments of quality were performed in 1996. In 1999, an internal quality application was carried out, in which units would score each other’s operations with the help of a consultant with extensive expertise in quality.
For the first four years, we would use the assessment criteria defined for ‘Suomen laatupalkinto’ (the Excellence Finland award). In 2000, we started using the criteria for the European Foundation for Quality Management. In keeping with the assessment criteria, we focus on evaluating our operation and constant improvement. Our goal is to improve our functions, services and products along with personnel well-being.
Customer orientation and constant improvement
Efficient operations require systematic leadership and actions focusing on customer needs in central government, too. Process management is a key ingredient in successful operations. It focuses on the design, direction and improvement of the processes related to the products and services the organisation produces while striving for smooth operations, cost-efficiency and error prevention. It is also important to pay attention to support processes as well as the management of supplier and cooperation processes.
Our existence is not an end in itself. We are here to provide quality services to our customers and other cooperation parties. By continually improving our operations, we ensure that we can keep offering these services going forward.
The areas of assessment have been grouped into eight entities: leadership, strategic planning, customer and market focus, data and data analysis, personnel development, process management, result orientation and social impact. Each assessment area and its sub-theme is assessed in light of three factors: do we employ an agreed method, how do we apply said method and how do we improve our operations in this regard.
The assessment is carried out by external auditors when an organisation applies for the excellence award.
The State Treasury and the path to quality 1994–2000
- 1994 The quality organisation is established, the management information system and the reporting procedure are adopted and the leadership development programme is initiated.
- 1995 The process of systematically measuring customer satisfaction and job satisfaction each year was started, the quality policy of the State Treasury was put in place, the specification and description of our operating process was started and quality training was initiated.
- 1996 The annual self-assessment of our operations based on the excellence award was started, the personnel section of the management information system and the first working environment programme of the State Treasury were completed, and the board of directors and managers met for the first ever annual management day.
- 1997 The HR strategy and the first ever Personnel Report were completed, the determination of immediate co-operation and participation was started, task descriptions were drafted for all tasks, the criteria concerning the level of challenge of tasks and individual work performance were completed and the planning for the strategies of three branches was initiated.
- 1998 The development of the strategic indicators for divisions was started, the expertise management system pilot was implemented in the Finance unit, the systematic performance and development review procedure was initiated with the entire personnel, the office system and centralised user support were organised, the strategies for information resources management were completed and ‘Allin klubi’, a club put in place to support the coping of supervisors, started its operation.
- 1999 The assessment of our operations based on the excellence award was implemented based on an application process, customer feedback systems were implemented in all units and product and service processes were identified and described.
- 2000 Management training for supervisors was initiated and the State Treasury steering model based on the balanced scorecard was completed, as was the State Treasury strategy for electronic services.
Government borrowing was transferred in its entirety from the Ministry of Finance to the State Treasury in the beginning of 1998. As Finland’s membership in the EMU was getting nearer, it would soon no longer be sensible to categorise loans into domestic and foreign. In the EMU, government borrowing could be carried out in the new domestic currency, the euro.
Centralising borrowing made the operations more efficient, as all of the expertise related to debt management could be found in the same place.
Finland joined the ranks of countries to issue Eurocurrency credit by issuing a loan of EUR 2 billion on 6 May 1998. The loan had a maturity of 11 years and would expire in April 2009.
Countries to beat Finland in the race to issue Eurocurrency loans in 1998 included Italy, Spain, Greece and last but not least, Sweden. Nevertheless, Finland can be considered the first of its kind. The loan issued by Finland was the first loan to be domestically documented by a country that had been a member of the EMU from the start. A loan issued by Sweden two weeks prior was also documented in domestic form, but Sweden did not become a member of the EMU in 1999. Eurocurrency credit issued by other countries have conventionally been Eurobonds, whose legal form differs from domestic loans.
Preparing for the EMU
The Eurocurrency loan was ultimately issued for strategic reasons. In the short term, issuing loans in euros was slightly more expensive than in Finnish marks. In theory, Finland could have secured the same loan for approximately 0.05 percentage points less in marks, albeit raising 12 billion marks from the domestic finance market in a short period of time would have been impossible. The most important goal of the loan was to expand the Finnish base for investors and attract new investors for domestic government loans. An extensive investor base does its part in reducing the loan’s volatility in the aftermarket. The Eurocurrency loan also reminded those who had previously invested in Finland of our country, seeing as the previous foreign transaction in Finland had occurred nearly a year earlier. Indeed, the State Treasury estimated that the long-term benefits of the loan more than covered the short-term costs.
Expanding the investor base was important ahead of the coming conditions in the EMU. Many domestic investors planned on diversifying their investments from Finnish State bonds to foreign investments once the exchange rate risk within the Eurozone was terminated. This meant that the State needed to expand its investor base outside the domestic market and introduce foreign investors to domestic bonds and the domestic auction system that would be continued in the EMU.