Members of Fortum Executive Management in Finland participate in the Finnish TyEL pension system, which provides for a retirement benefit based on earnings in accordance with the prescribed statutory system.
Under the Finnish pension system, earnings include base pay, annual bonuses and taxable fringe benefits, but gains realised from the share bonus plans are not included in that definition. Members of Fortum Executive Management outside Finland participate in pension systems based on statutory pension arrangements and market practices in their local countries.
In addition to the statutory pensions, the members of Fortum Executive Management have supplementary pension arrangements. The Group policy is that all new supplementary pension arrangements are defined contribution plans, and the pension plan for the President and CEO is also a defined contribution plan.
The retirement age for Fortum’s President and CEO is 63, and for the other members of Fortum Executive Management the retirement age varies between 60 and 65. For the President and CEO and other members of Fortum Executive Management, the maximum pension premium percentage can be 25% of the annual salary. Members, who have joined Fortum prior to 1 January 2009, are entitled to defined pension plans in which the benefit is 60 or 66% of the final pensionable salary. In these cases, the pension is provided by an insurance company or Fortum’s Pension Fund.