Automated decision-making

In this decision, Ilmarinen Mutual Pension Insurance Company has assessed the requirements for deploying an automated decision-making procedure for changing an entrepreneur’s YEL income.

Ilmarinen Mutual Pension Insurance Company makes decisions concerning changing entrepreneurs’ YEL income either based on an entrepreneur’s application or due to the provisions of the Self-Employed Persons’ Pensions Act (1272/2006) and the provision on the entry into force of the act amending it (1157/2022) that Ilmarinen is obligated to comply with.

Provisions concerning entrepreneurs’ YEL income and changing an entrepreneur’s YEL income are laid down in sections 112 and 112a of the Self-employed Persons’ Pensions Act (YEL, 1272/2006) and in the provision on the entry into force of the act amending it (1157/2022).

Decision

Ilmarinen Mutual Pension Insurance Company will deploy an automated decision-making procedure for changing the entrepreneur’s YEL income.

Grounds for the decision

According to section 53e, subsection 2, of the Administrative Procedure Act (434/2003), an authority can use automated decision-making in a matter that does not involve facts requiring case-by-case consideration or which involves facts requiring case-by-case consideration that have been assessed by an official or another processor in the matter. The decision-making must be based on the processing rules drawn up on the basis of applicable law and prior consideration as referred to in section 2, subsection 16, of the Act on Information Management in Public Administration (906/2019).

Ilmarinen Mutual Pension Insurance Company’s automated decision-making procedure in decisions concerning changing an entrepreneur’s YEL income is based on pre-established processing rules.

Based on Section 112, subsections 1 and 2, of the Self-employed Persons’ Pensions Act, when an entrepreneur’s insurance begins, Ilmarinen Mutual Pension Insurance Company confirms for the entrepreneur an annual YEL income that corresponds to their work contribution. YEL income is the salary that would reasonably be paid if a person with the same professional skills were hired to carry out the self-employed person’s work, or compensation that can otherwise be considered to correspond on average to such work. YEL income is confirmed on the basis of an overall assessment. When confirming YEL income, Ilmarinen Mutual Pension Insurance Company considers the median salary of full-time workers in the relevant private-sector industry as the salary and compensation referred to above, and takes into account other information describing the amount of the entrepreneur’s work contribution, the scope of the entrepreneurial activities, the entrepreneur’s professional skills and the value of the entrepreneur’s work contribution.

By virtue of section 2, subsection 1, paragraph 6, of the Act on the Finnish Centre for Pensions, the Finnish Centre for Pensions has issued recommendations on confirming an Entrepreneur’s YEL income, changing an Entrepreneur’s confirmed YEL income and an Entrepreneur’s total YEL income. Based on section 2, subsection 1, paragraph 8, of the Act on the Finnish Centre for Pensions, the Finnish Centre for Pensions additionally maintains and develops the database required for determining the YEL income as referred to in section 112, subsection 2, of the Self-employed Persons’ Pensions Act, to support the recommendations referred to in paragraph 6.

Based on the act governing it, the Finnish Centre for Pensions maintains the database required for determining YEL income in the industry’s calculation service (database required for determining YEL income). The calculation service gives the entrepreneur a YEL income recommendation that aims to match the estimate of the value of the entrepreneur’s work contribution based on a model created on the basis of statistical data and application practice. With the help of the YEL income recommendation calculation service, the YEL income of entrepreneurs pursuing entrepreneurial activities of a specific scale in a specific industry is defined according to uniform criteria in all pension institutions.

Ilmarinen Mutual Pension Insurance Company has assessed that for cases in which an entrepreneur applies for confirmation of YEL income that deviates from the upper or lower limits of the Finnish Centre for Pensions’ recommended YEL income, case-by-case consideration is required. In addition, case-by-case consideration is required in situations where an entrepreneur has given Ilmarinen Mutual Pension Insurance Company additional information about the factors affecting the financial value of their work contribution, in which case Ilmarinen will evaluate the impact of the information provided by the entrepreneur on their YEL income. In these situations, our processing rules direct the entrepreneur’s YEL income to be assessed by a natural person, and Ilmarinen Mutual Pension Insurance Company will not issue a decision in an automated decision-making procedure.

Cases in which an entrepreneur seeks confirmation of YEL income that is within the upper and lower limits of the Finnish Centre for Pension’s recommended YEL income thus do not require case-by-case consideration.

Decisions issued in Ilmarinen Mutual Pension Insurance Company’s automated decision-making procedure are justified as required by section 95a of the Self-employed Persons’ Pensions Act, meaning our company’s decisions on confirming YEL income include data used as the basis for confirming YEL income. The entrepreneur will receive Appeal Instructions (i.e. administrative review) attached to decisions. There is no cost for requesting an administrative review, and the request is examined by a natural person, meaning the entrepreneur’s request for a review or a comparable request is not resolved automatically. The consideration of administrative reviews thus fulfils the requirements of section 53e, subsection 4, of the Administrative Procedure Act (434/2003).

List of the documents serving as the basis for the deployment decision

1. Documentation on procedures and processing rules for YEL income changes, division of duties related to the obligations laid down in Chapter 6a of the Information Management Act
2. Requirements for deployment and applied provisions
3. Key quality assurance measures
4. Procedural guidelines for information security and data protection.

Date of deployment and date when the decision was made

The decision was made on 9 June 2023.
The date of deployment is 16 June 2023.

Information on the decision-maker

The decision on the deployment of an automated decision-making procedure concerning decisions on changing an entrepreneur’s YEL income was made by Ilmarinen Mutual Pension Insurance Company’s insurance and pension services line’s executive group, which is headed by Executive Vice President of Insurance and Pension Services Tiina Nurmi.

Ilmarinen Mutual Pension Insurance Company’s contact details for additional information on the use of an automated decision-making procedure

For more information, please contact Minna Hakkarainen, Director of Insurance Services, tel. 010 284 11 (switchboard) email minna.hakkarainen@ilmarinen.fi.

Communication

This decision is publicly available on Ilmarinen Mutual Pension Insurance Company’s website, ilmarinen.fi.

Applied provisions

• Administrative Procedure Act (434/2003)
• Act on Information Management in Public Administration (906/2019)
• Self-employed Persons’ Pensions Act (Yrittäjän eläkelaki 1272/2006)
• Act on the Finnish Centre for Pensions (Laki Eläketurvakeskuksesta 397/2006).