Recommended actions for personnel funds in the exceptional corona-affected situation

Personnel fund assets are valued once per year, the last day of the fiscal year. For many personnel funds, it is during the first half of the year. The end of February was a starting point for the stock market dive, and it has raised concern and questions among personnel fund members and fund boards. What can a personnel fund do? 

If allocating bonuses is voluntarily, it is simple for the members to just take last year’s bonuses as cash, and leave the personnel fund capital as it is, even if there is something to withdraw, and the capital seems depreciated. It is understandable, that there might be a conflict of interest between the member and the fund. If the members do not make withdrawals, there is no need for the fund to realise the asset to cash. If the fund can pay out withdrawals using last year’s personnel fund installment, the choice is easier to make. This requires clear and constant communication to the members, so they can make balanced decisions.

Sturdier, but the only option to some personnel funds, is to change the date of appreciation, which is set in the fund rules, together with the fiscal year. This requires a change in the fund rules, made by the annual meeting. To change the fiscal year, the tax authorities require the decision to be made two months prior the end of the ongoing fiscal year, and the Finnish Patent and Registration Office requires one month in advance to file the announcement. This decision requires calculation and thought process, if current appreciation seems very low, and it would be remarkably better 1–6 months later.

EAM has asked the Cooperation Ombudsman to clear the possibilities to alter the fore mentioned time frames. The readiness law paragraph 23 subsection three, and its statute of activation regarding personnel funds appreciation date and filing dates, could contain these facilitations. To make these operations, please quickly contact your personnel fund administration service provider.

 

Additional information:
Timo Wallenius, Product Manager, Evli Awards Management Oy, p. +358 (0)40 552 5300timo.wallenius@eam.fi