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pensions. In accordance with the reform, the spouse’s pension changes Annual Report of the Board
to a fixed-term pension for those born in 1975 or after, orphan’s
pension is paid until the child reaches the age of 20, and the spouse’s Seafarers’ Pension Fund 2021 Annual Report
calculated share of the survivors’ pension can be paid to the children if
there is no widow(er) to receive the spouse’s pension. This reform does 77
not concern those widow(er)s whose spouse died prior to 2022.

Finland’s dependency ratio has deteriorated, which puts pressure
on the level of pension contributions in the long term. In order to
control the pressures to increase the level, ways are being sought to raise
investment returns, which means that the level of risk related to future
investments in the pension system will be higher.

Result and Solvency

The overall result of the Seafarers’ Pension Fund for the year 2021 was
positive at EUR 64.5 million. The result is comprised of the result of
the insurance business, the result of investment activities, government
shares and administrative expenses.

For the Seafarers’ Pension Fund, the return on investments was
16.2% and the real return 12.7%. The net investment income at
current values totalled EUR 201.2 million.

The Fund’s solvency ratio was 194.4% at the end of the year (182.0%
in 2020). The Fund’s solvency is still strong and one of the best in the
field. The solvency capital was 3.23 times the solvency limit. In euro,
the solvency capital increased by EUR 122.9 million from the preceding
year and totalled EUR 687.7 euro at the end of 2021.

Premium Income and Government Share

A total of 31 shipping companies were insured by the Seafarers’ Pension
Fund as employers; the number reduced by 1 from the preceding
year. Insurance contributions were paid for altogether 156 vessels, as
compared to 148 vessels in 2020.

The number of insured employees totalled 5,709 persons (6,363
in 2020). The significant decrease in the number of insured persons
was largely due to the impact of the COVID-19 pandemic on Finnish
navigation within the passenger ship sector. Within the passenger ship
sector, a significant part of the employees have been laid off since spring
2020. Passenger ships have been removed from their regular scheduled
traffic and only those vessels that received security of supply support
remained in traffic to take care of Finland’s import and export transports.

The payroll increased only slightly from the low level of 2020
and was still feeling the effect of the coronavirus pandemic. The
increase was 2.3%. In 2021, the payroll for navigation totalled EUR
211.0 million. Accordingly, the MEL insurance contributions paid by
employers amounted to EUR 24 million and those paid by employees to
EUR 16 million. Thus, the premium income of the Fund totalled EUR
40 million. The premium income increased by EUR 0.8 million (2%)
from the preceding year.

As a result of the reform of the seafarers’ pension system in 2016,
the MEL insurance contributions for seafarers, i.e. employees, are at the