Who falls within the sphere of MEL?

The Seafarer’s Pensions Act (MEL) applies to an employee who is employed on a Finnish merchant vessel used for foreign trade.

For a vessel entered in the Register of Merchant Ships in Foreign Trade, the Seafarer’s Pensions Act applies to citizens of an EU or ETA State and to citizens of third countries who reside permanently in an EU or ETA State.

On icebreakers, the Seafarer’s Pensions Act applies to the crew and to ship’s officers in an employment contract. Ship’s officers in a public-service relationship fall within the sphere of the State Pensions Act (VaEL).

If a foreign vessel is hired to Finland primarily without a crew, the Seafarer’s Pensions Act only applies to those employees who are employed by a Finnish shipping company or by another employer used by the said shipping company. However, if a Finnish vessel is hired abroad primarily without a crew, the Seafarer’s Pensions Act only applies to those employees who are employed by the owner of the vessel or by another employer used by the said owner.

Reflagged vessels

The Seafarer’s Pensions Act (MEL) applies to Finnish citizens and foreigners who live permanently in Finland and who work on a vessel owned by the foreign subsidiary of a Finnish company with the provision that the Finnish parent company has made a commitment to the Seafarer’s Pension Fund concerning the payment of insurance contributions.

EU regulations

The main principle is that seafarers fall within the sphere of the pension legislation of the EU or ETA State under whose flag the vessel operates.
If a seafarer is posted temporarily to work on a vessel that operates under the flag of another EU or ETA State, his or her pension insurance is handled in accordance with the legislation in the country of origin. Temporary work may last no longer than two 12-month periods. The regulation applies if the employment contract with the posting employer remains valid.

If the domiciles of the seafarer and his or her employer are in the same EU or ETA State but the seafarer works on a vessel that sails under the flag of another EU or ETA State, the seafarer is insured in accordance with the pension legislation of his or her country of domicile.  

The application of specific provisions that differ from the main principle requires certificate E101 issued by the Finnish Centre for Pensions concerning the application of Finnish social insurance legislation. More information about insuring employees working abroad is available on the website of the Finnish Centre for Pensions: Work abroad and Pension from abroad.
 
MEL does not apply to

The Seafarer’s Pensions Act (MEL) does not apply to independent entrepreneurs because they are not in an employment contract as intended by the Act. Drawing the line between the Seafarer’s Pensions Act (MEL) and the Self-Employed Persons’ Pensions Act (YEL) is determined in the same way as for drawing the line between the Employees’ Pensions Act (TyEL) and the Self-Employed Persons’ Pensions Act (YEL).

The Seafarer’s Pensions Act (MEL) also does not apply to employees who work as musicians, actors, dancers or other performing artists if the employment contract is intended to last for less than one year. The aforementioned artists are insured in accordance with the Employees’ Pensions Act (TyEL).

The Seafarer’s Pensions Act (MEL) does not apply to employees on domestic merchant vessels; they fall within the sphere of the Employees’ Pensions Act (TyEL). If an employee works on foreign and domestic merchant vessels within the same employment contract, all work must be insured in accordance with the pension legislation that applies to the majority of the work. When arranging pension security, an employment contract is not split between different pension legislation.

If any confusion arises as to whether the Seafarer’s Pensions Act (MEL) applies to a certain individual or to the people employed on a certain vessel, the matter is resolved by the Board of the Seafarer’s Pension Fund.