More detailed information facilitates customers’ YEL income review process

Varma’s second year of YEL income reviews went even more smoothly. The tax authority provided more detailed information which meant fewer corrections for customers, and the experience gained from the previous year gave Varma’s specialists more confidence and sped up the process.

“It was important to collect all the available data to ensure that our proposal was as accurate as possible the first time round. We also systematically worked to identify different factors in the data affecting the YEL income. Even though the legally stipulated review obligation hasn’t always sat well with our customers, we have been able to make it a more smoothly running procedure,” says Insurance Services Director Riikka Nivus.

This year, all of the earnings-related pension companies reviewed incomes that were under EUR 25,000 in YEL insurance policies that began before 1 January 2023 and at least three years had elapsed since the YEL income was last confirmed or substantially changed. This year, Varma reviewed the YEL income of around 7,000 entrepreneurs.

We informed entrepreneurs whose YEL income matched the value of their work input that a review was conducted and their YEL income was not changed. Twenty-one per cent of the entrepreneurs subject to a review received that notice.

If the review determined that the entrepreneur’s YEL income did not match the value of their work input, the entrepreneur received a proposal for a new level of YEL income. 3.5 per cent of entrepreneurs objected to our YEL income proposal and provided an explanation of the factors affecting the value of their work input, as well as their opinion of their income level.

Entrepreneurs whose YEL income changed in the review received an appealable decision concerning changing their YEL income. A small number of entrepreneurs chose to appeal the decision. Compared to the previous year, the number of appeals concerning decisions to adjust YEL income has fallen significantly.

Seventeen per cent of entrepreneurs responded to the messages we sent concerning a proposed new YEL income level.

The average increase for Varma’s customers was EUR 3,836.

Next year, earnings-related pension insurance companies will review YEL incomes that are over EUR 25,000 in YEL insurance policies that began before 1 January 2023 and YEL insurance policies whose YEL income was not reviewed for another reason in 2023 and 2024.

At Varma, we will review the YEL incomes of around 14,000 entrepreneurs in 2025. We will inform customers about the schedule and the proposal review ahead of time. We will start sending the review letters in June, but some of our customers may only receive the letter in October. Unfortunately, we are unable to give the exact date for individual reviews.

Our customers should check and update their address and contact details in Varma Online Service to ensure that all important information arrives on time.

If your insurance is up for review next year and you wish to already see how YEL income reviews work, you can find answers to the most frequently asked questions on our page YEL income review – Varma

The general economic situation and many other company situations strongly impact entrepreneurs’ day-to-day operations and can result in payment difficulties. It is important to contact our customer service well in advance and agree on an extended term of payment or flexibility in payments.

“We can’t perform miracles, but even agreeing on an extended term of payment can give you enough time to sort out your matters. Contact us immediately when you receive our invoice. Don’t wait for the reminders,” says Nivus.

Read more about flexibility on our varma.fi page I wish to use the flexibility option in YEL contributions – Varma

The process of determining YEL income and the related YEL income calculator, which is used by the whole industry, have received criticism. The need for improvement is also recognised at Varma. The calculator does not always account for all of the important factors needed for reviewing the YEL income.

“At Varma, we would also like it if the problems with entrepreneurs’ YEL insurance were solved and the sector gained clearer solutions. Entrepreneurs understand the impact of YEL income on earnings-related pensions, but in a difficult and acute financial situation it is not always that easy to take it into account,” says Varma’s Senior Vice President, Actuaries Pasi Mustonen.

Check your contact details and address in the Varma Online Service.