Työttömyysvakuutusrahasto - Financial Statement Release

Unemployment Insurance Fund's (TVR) Financial Statement Release for 2016

Unemployment Insurance Fund     Financial Statement Release     21 March 2017 at
11:00

Unemployment Insurance Fund's (TVR) Financial Statement Release for 2016

The  Unemployment Insurance Fund's  result for the  financial year 2016 showed a
surplus

  * Unemployment insurance contributions and other income in total EUR 4,083
    (3,330) million
  * Unemployment benefits paid and administrational expenses in total EUR 3,859
    (4,002) million
  * Change in net position (for the financial year) EUR 220 (-677) million
  * Net position EUR -466 (-686) million
  * Investments and assets in total of EUR 704 (604) million
  * Raised debt and other loans EUR 1,170 (1,290) million
  * Unemployment rate on average 8.8% (9.4%)
  * Return on investments 0.3% (0.2%)
The figures for 2015 are given in parentheses.

 Managing Director Janne Metsämäki:

Employment trends and higher contributions resulted in increased Fund earnings

The Unemployment Insurance Fund's result for 2016 turned into a marked surplus,
even though during the budget preparations it was estimated that the Fund would
show a major deficit. The change was driven by the halt and the subsequent
downturn in 2016 in unemployment, as Finland's economy returned to slow growth
after a slump that had lasted several years. The Fund published several releases
about the changed revenue forecasts in 2016.

In 2016, Finland's gross domestic product grew by an estimated 1.6 per cent. The
unemployment rate decreased by 0.6 percentage points year on year.  The Fund's
financial result was EUR 220 million in surplus. The Fund's expenses decreased
by 4 per cent while income increased by 23 per cent. The higher unemployment
insurance contributions, entered into force at the beginning of 2016, had a
significant impact on the increase in income. In 2016, the Fund's earnings-
related benefit expenses and other benefits were financed by the unemployment
insurance contribution without additional borrowing.

While the Fund's business cycle buffer remained negative in 2016, by the end of
2016 surplus revenue had decreased the buffer deficit to EUR 466 million. Return
on the Fund's investments was 0.3 per cent in 2016, which can be considered a
good result, taking into account the Fund's cautious investment policy and the
negative interest rate environment.

The Fund's credit rating, granted by Standard & Poor's, was renewed in early
2016. The Fund's credit rating normally follows the government rating for
Finland. In 2016, the Fund prepared for the renewal of its credit facility and
the related government guarantees, which will take place during the first half
of 2017.

As an issuer of bonds, the Fund must comply with the requirements of the
Securities Markets Act. In early 2016, the Fund's Board of Directors approved
the insider regulations, which were updated in accordance with the Market Abuse
Regulation that entered into force in July 2016.

The targets set for the determination and collection of unemployment insurance
contributions were achieved in 2016. The level of customer service related to
insurance contributions remained high throughout the year, and the Fund achieved
its objective of increasing electronic service provision in wage sum reporting.
The amount of collected liability components increased markedly year on year.

The Competitiveness Pact concluded by the national labour and employer
confederations will result in several changes at the Fund. From the beginning of
2018, employee and employer unemployment insurance contribution rates (average
contributions) will be equalised. At the same time, the composition of the
Fund's administration will change. The maximum level of the Fund's business
cycle buffer was temporarily increased to correspond to the annual expenses
arising from an unemployment rate of 7 per cent. The amendments of the law were
approved by Parliament in the second half of 2016. The Competitiveness Pact
includes a clause on the provision of a government guarantee for the Fund's debt
financing without counter securities or guarantee payments.

The Fund continued to develop its information systems and prepared for the
deployment of a new insurance contributions system. With regard to the
preparations for the national income register, the Fund will participate in the
first phase, set to be launched in 2019.

In 2016, the Fund performed well in its statutory and other tasks. The Fund's
personnel deserve a great praise for this. Year 2016 saw the Fund preparing for
and implementing diverse development projects. The Fund carried out a survey of
its operational culture and prepared for the follow-up measures. Together with
its employees, the Fund defined its values. According to them, we seek to
achieve an Unemployment Insurance Fund which encourages reform and operates
consistently with an uncomplicated service provision.

Janne Metsämäki
Managing Director

Key figures

----------------------------------------------------------------------------
 EURm                                                  2016 change %    2015
----------------------------------------------------------------------------
 Unemployment insurance contribution income *        4 083      23 %  3 330

 Other income (MSAH)

 Contribution rates

   employee contribution %                             1,15     77 %    0,65

   employer, base %                                    1,00     25 %    0,80

   employer, large firms                               3,90     24 %    3,15

 Benefits payments total                             3 859      -4 %  4 002

   Unemployment funds (UIF)                          1 581      -7 %  1 703

   Unemployment funds (MSAH)                         1 102      -4 %  1 142

   Finnish Centre for Pensions                         846      -6 %    900

   Education Fund                                      116      18 %     98

   Social Insurance Institution of Finland (Kela)      168      39 %    121

   Ministry of Employment and the Economy               23      10 %     21

   State Pensions Fund                                  11      43 %      8

   Administrative expenses                            11,7      21 %    9,7

 Change in net position                                 220             -677

 Investment return %                                    0,3              0,2

 Net position                                          -466             -686

   Money market investments                             262     27 %     207

   Fixed income investments                             359     48 %     242

   Borrowings, debt outstanding                     -1 023           -1 109




Financial Statement Release 2016
This Stock Exchange Release is a consent of TVR's Financial Statement Release
2016 ja consists the most relevant information of that Release. Financial
Statement Release 2016 is published in full as a pdf file attached to this
Release and is also available in TVR's web site at tvr.fi
The Financial Statement Release 2016 is unaudited.

Financial releases in 2017

Annual report 2016 is published in TVR's web site on 22 March 2017.
The Interim report for the period 1 Jan - 30 Jun 2017 will be published on 29
August 2017.

Additional  information:

Janne Metsämäki, Managing Director. tel. +358 40 522 3614
Tapio Oksanen, Deputy Managing Director, CFO tel. +358 40 539 4651


Helsinki, 21 March 2017

Unemployment Insurance Fund (TVR)

Tapio Oksanen
Deputy Managing Director


Distribution:
NASDAQ OMX Helsinki
Media
www.tvr.fi


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Attachments:

TVR Financial Statement Release 2016.pdf