The freights of domestic vessels grew on average by 5–10 per cent each year from the early 1950s to the end of the 1970s. Imports now rose to become greater than exports, in contrast to the export-driven nature of the sailing-ship era, owing to the great demand for oil. The heyday of oil is illustrated by the fact that the first domestic supertankers, the Tiiskeri (1969) and the Enskeri (1970) of the state-owned Neste Oy, were so large that they could not pass through the Danish straits even when fully laden.

Even more important in Finnish shipping from the 1960s onwards was passenger traffic. The abundant labour needed in the services of passenger ferries changed the structure of the profession to be clearly more female-dominated. Every third seafarer was a woman in 1980, whereas some twenty years earlier women had made up less than 10 per cent. The cargo ships in foreign traffic, by contrast, remained a man's world. The number of insured seafarers rose to its peak of 17,000 in 1973.

The bulk of foreign trade went by sea on the ships of domestic shipping companies. Alongside the favourable economic conditions, the state supported sea traffic through taxation, through ownership and by providing infrastructure. Year-round winter navigation extended from the 1970s onwards as far as the innermost reaches of the North Sea along the fairways opened by domestically built icebreakers. The period from the late 1950s to the mid-1970s is often remembered as the boom period of Finnish road traffic. The growth of shipping, however, exceeded the growth rate of the gross domestic product at the time. The growth continued despite the general recession of the 1990s until the turn of the millennium, while other modes of transport were in decline for years.

Shipping was regarded as a strategic industry and as essential for the transports of domestic industry. Not quite everything went according to plan. Attempts were made to connect the lake routes and the inland economy to the seas through large investments, such as the construction of the Saimaa Canal in the 1960s. Despite the measures, inland waterway traffic lost its significance, and its workforce diminished.

Finland's merchant fleet grew during the 1960s and 1970s into the sixth largest in the world in relation to population. The size of the merchant fleet was one million tonnes in 1966 and two million in 1975. Our own domestic speciality was the combination of passenger, car and cargo traffic. The beginning of ro-ro traffic, which operates without a crane, was made precisely with car ferries. In both vessel classes Finland was indeed among the world's leading countries. Because these vessels typical of Finland required a great deal of labour, the oil crises that began in the mid-1970s did not at first reduce the need for domestic maritime labour.

The streamlining of sea transport lowered freight costs to one third of the 10 per cent of the freight's value that had prevailed in 1900–1960. As the amount of labour had not grown significantly despite the increase in tonnage and the strong demand, productivity nearly increased fortyfold!

The Fund as an anchor for the maritime parties amid rising costs

Unlike during the sailing-ship era, seafarers did not merely want, but demanded, their share of the profits. The older generation indeed remembers the seemingly endless labour disputes of 1960s shipping and the seemingly endless rounds of mediation. Even the comic schlager "Kaikki joukolla jäätä särkemään" was not allowed to be played on the radio during the maritime strikes, because the name "Wälläri" was mentioned in its interjection.

The sector's trade unions successfully advanced their members' interests. The earnings level in maritime work grew, for during the period 1950–1980 the real value of the average monthly wage in the maritime sector nearly tripled. The good profitability helped to improve benefits and security, and the maritime sector's social security developed briskly. Wages and the other benefits accruing from maritime work improved, but obtaining work permits for the vessels of other countries became more difficult. This enticed domestic seafarers to stay under their own flag. There was indeed no longer any need to desert from Finnish ships. It must nevertheless be remembered that, especially among the non-permanent employees of shipping companies, the crew's short-term employments and the periods of unemployment between them remained rather common in maritime work.

On one matter, however, there was no dispute. After its establishment, the maritime sector's pension scheme continued as an institution in which the parties achieved common interests and wished to develop their benefits. This concord had already functioned as a key factor at the law's preparatory stage. All success stories, however, have their reverse side. The same improvements that gave seafarers a better standard of living and working conditions gave shipping companies more expensive labour costs. At the same time, shipping companies also invested in specialised, ice-strengthened and expensive vessels, such as car ferries, which had large crews. Finland had in a short time turned into a high-cost country for shipping, which began to affect the industry in the 1980s.[1]

First, strength is gathered and benefits are supplemented - The Seafarers' Pension Fund's apprenticeship years

MEK's board organised itself already in January 1956, before the president had ratified the Seafarers' Pensions Act (MEL). In addition to the members of the committee that had prepared the act, representatives of the maritime organisations took part in the meetings. Besides the Finnish Shipowners' Association, Åland, as a maritime province, had its own representative. Vice-Judge Stig Lundqvist served in the fund's administration for over three decades. The meetings were also attended by the representatives of the engineers and radio operators, who were at that time outside the board.

As the fund's agent, that is, its director, the lawyer Jaakko Oravisto from the Traffic Insurance Association was chosen in February 1956 on the recommendation of board chairman Pentikäinen. In addition, the fund needed a secretary and also an expert physician to assess incapacity for work. On 5 April 1956, Assistant Notary Anja Tirri and Licentiate of Medicine Henrik Rinne began in their posts. The employment relationships of the first fund employees with MEK came to span decades, which has been typical at pension institutions. Experience of statutory pensions could have been obtained only from the Social Insurance Institution. Later, many employees indeed transferred from there, especially to the Finnish Centre for Pensions, when the general earnings-related pension scheme started up its operations half a decade later, in the autumn of 1961.

Money for the fund's operations would come in from the insurance contributions only several months later at the earliest. For this, instructions had to be drawn up and sent in advance to the shipowners on paying the pension contributions. The committee preparing the MEL had prepared for the anticipatory work by proposing that the seamen's relief fund, which was to be abolished, be retained for launching the operations. As individual grants, these funds had shrunk to insignificance, but with this fund of nearly 50,000 present-day markkaa, MEK got under way. Later, in a corresponding situation, the Finnish Centre for Pensions was set in motion with the help of a bank loan. At the very first, MEK operated in the insurance department of the Ministry of Social Affairs, until its three employees obtained their own premises on the Pohjoisesplanadi. From there they moved to larger premises at Snellmaninkatu 13.

Communication has always been central in earnings-related pension matters. Before the act came into force, the new fund's director Jaakko Oravisto gave a presentation on the new pension in Finnish and Swedish in the Finnish Broadcasting Company's seamen's programme in May 1956.[3] In addition, a guidance booklet was also needed, a separate edition of the Seafarers' Pensions Act supplemented with explanations and examples, plainly entitled "Seafarer's Pension". The communication had worked and the pension contribution forms had reached the shipping companies, for the 1957 annual report stated that "the domestic tonnage belonged to the fund's sphere of operations".

MEK's fund assists with investments and arouses interest more widely too

The Seafarers' Pensions Act, which guided insurance and pension benefits in detail, offered only the general outlines for investing the assets accruing from the contributions, which were to be directed to "purposes serving the development of the merchant fleet and shipping". The act also offered the fund the possibility of owning shares in housing and real estate companies. With Pentikäinen's assistance, director Oravisto put forward a proposal for what in present-day language is called an investment strategy, with which, alongside returns, the aim was to support both the operational capacity of the maritime sector and the welfare of its workers. Of the assets accruing from the insurance contributions, 80 per cent would be invested in shipowners' vessel credits and 20 in residential building production for rental dwellings for seamen.

This principle too, as it were, anticipated the most important form of investment during the first decades of the general earnings-related pension, premium lending. An automatic right to credit was not yet guaranteed. The shipowners' vessels served as collateral for the fund's loans. Already in the autumn of 1956, the first vessel credits were granted to shipping companies. Even though investing in shipowning had begun to interest companies after the war. As there was a shortage of capital in Finland, the loans granted by MEK brought welcome assistance to this. On account of suitable vessel types and tax benefits, domestic shipyards were favoured in the acquisitions. MEK liked to remind that "its loans had annually contributed to the creation or maintenance of 500 jobs in Finland's merchant fleet" and that "MEK's loans had been involved in the acquisition of 20 modern motor-driven ships".

Investing the pension assets in new production helped the position of seafaring folk amid the general housing shortage that then prevailed. The activity was justified on the grounds that, on the rental housing market, seamen were in an even worse position than others because of the fragmented nature of their work. Already in August 1956, after the first insurance contributions had come in, negotiations were begun with the Social Housing Production SATO on the construction of an Arava residential building in Pohjois-Haaga in Helsinki.

Knowledge of the assets accruing to the new fund spread quickly. Already during the first year of operation, requests for grants came from charitable institutions and organisations, which were answered by stating that "the pension fund's property may not be used for a purpose foreign to its operations". A couple of years later, the Seamen's Welfare Fund wished for the possibility of collecting its funds in connection with the pension contributions. Alongside this, the welfare fund requested "a fixed part of the pension contribution" for itself. MEK's board rejected the proposal as contrary to law and "taking into account the smallness of the pensions, such a procedure is not even conceivable".[4]

Work continues past pension age, but tuberculosis is a torment

From the autumn of 1956, MEK's board, which convened almost weekly, was occupied most by pension decisions and the interpretation and demarcation of the act. The deck and engine officers, but also the stewardesses, were at first typical recipients of MEL pensions on account of their on average more continuous maritime work compared with the crew. Maritime work performed before the act came into force on 1 June 1956 accrued, as sailing months, ⅔ of a pension compared with contribution months.

The accrual of the pension was restricted by several qualifying periods. In the early years, especially in the crew's pension applications, the decision was often a rejection, because they lacked vessel work for the three years preceding the act or had come to their first vessel work after turning 50. An absence from the sea longer than three years restricted the accrual either to a so-called paid-up pension or to a refund of the contribution. In those cases, only the insured person's own contribution share with interest was credited to him, without the shipowner's and the state's share; the board made such decisions in great numbers at first.

The first pension decision concerned a sea captain born in 1884, that is, 71 years old, for whom nearly 40 years of sailing accrued a pension three times greater than the fund's then average level.[5] The old-age pensions granted in 1956 remained on average at 88 present-day markkaa and the disability pension at 120. The old-age pension was, incidentally, much the same as when the general earnings-related pension act for the private sectors began in 1962, 87 markkaa (although the value of money had deteriorated over six years).

National pensions, in keeping with their name, gave everyone a basic pension. Thus the total pension level could at best rise above the then target of the MEL pension, which was 50 per cent of the wage. The MEL and the national pension could together be at most 60 per cent of the wage, a rule that the law's drafter Pentikäinen regards as a forerunner of the later coordination rules. From the beginning of 1957, the change of national pensions into flat-rate pensions helped to improve the smallest total pensions. In addition to the relative percentage (60) pension ceiling, the act restricted the total amount to 1,200 present-day markkaa per year, at which limit the pension remained at 100 markkaa a month. Often the national pension nearly covered the total amount of the pension. The first decisions on coordination the board made already in 1956 for the pensions beginning from the start of the following year.[6]

Because the pension level in the early years was still rather low, vessel work was typically continued after pension age. Alongside the wage, each month accrued one further per cent of pension. A short-term deferral produced an ample improvement, an accrual that was not restricted by coordination. Even so, departure for the MEL old-age pension on average moved earlier already from the start of the 1960s, which can be observed in the various personnel groups from the following layout:

The number of MEL-insured persons stood at 10,831 during 1958, whereas the previous year they had still been 12,705. The number of pension recipients changed moderately during the first decade from 63 to 667, although in proportion the growth was tenfold.

Numerous disability pensions were granted in the early years as fixed-term. Finland's merchant fleet still moved in the 1950s largely on the power of the steam produced by coal firing. The dusty conditions of the engine rooms served as a breeding ground for the Finns' most common and most serious endemic disease of the early 1900s — tuberculosis. Much attention was paid in the early years to combating the disease, for two thirds of the disability pensions were due to the lung disease. Medical science began to bring relief to this scourge that tormented seamen, for already in 1958 "22 pension recipients recovered". The protection of the Seafarers' Pensions Act contributed for its part to getting the sick into treatment at an early stage and to their rehabilitation. The fund declared the disease conquered in 1964. Soon the causes of incapacity for work changed, for the Finnish men's scourge, heart disease, began most often to lead to pension.[7] From the standpoint of working conditions, it may have been favourable that in the late 1950s about a quarter of the merchant fleet's on average 40-year-old and steam-driven vessels were out of use.

Social aspects in benefits and in cooperation, and TEL and LEL come into force

The quietening of vessel traffic in the late 1950s remained temporary. During the new decade, a tailwind prevailed in Finnish shipping. It was not only that the ships became motor-driven; oil consumption grew generally. The tanker tonnage grew by as much as a third from 1960 to 1961. The good economic conditions spurred reforms in the MEL scheme. The improvements did not weaken the investment of the assets left over from the contributions. The fund's loans were tied to indices, with which "the increases could be covered in their entirety".

The first change to the benefits was the survivors' pension, which had been left out of the MEL benefits because of financial uncertainty. The contribution income had, however, developed favourably despite the downturn of domestic shipping in the late 1950s. According to an actuarial study made in 1960, it emerged that, without raising the insurance contributions, a limited survivors' pension could be added to the fund's benefits from the beginning of 1961. The proposal for a retroactive entry into force of the survivors' pension was rejected because of its costs and as contrary to the principles of social insurance.[8]

The benefit came in handy, for already after a year a third of the granted pensions were the pensions of widows and orphans, and soon the share amounted to the same of the pensions paid by the fund. The survivors' pension did not belong to the benefits of the earnings-related or the national pension until the late 1960s, so in relation to its time it was a question of a progressive statutory benefit. In voluntary pensions, however, the survivors' pension was rather customary.[9] Furthermore, as the decade approached its midpoint, a funeral grant was attached to the MEL benefits in 1964. Its amount, tied to the deceased's age (larger for younger persons), was, in relation to the then value of money, a rather considerable 1,000–4,000 markkaa.

The seamen's pension act was no longer the only act for the private sectors, when TEL and LEL came into force on 1 July 1962. They had many similarities to MEL, such as earnings-relatedness, but numerous fundamental differences, the comparison of which is in the accompanying table. Continuous maritime work produced a better pension in a shorter time. MEL's weakness, in turn, concerned something important to the insured, the inviolability of the accrual. Some parts were again ahead of their time, such as the division of the contribution and the flexible pension age. The new pension acts broadened the security of the person who had worked at sea, because pension could accrue from other paid work, and not only from the maritime sector.

Table: The original content of the Seafarers' Pensions Act of 1956 and the TEL earnings-related pension act of 1961, and a few central changes

Those in the service of inland waterway traffic, to whom MEL did not apply, were attached to the pension act for short-term employment relationships (LEL), whose features and benefits were roughly the same as in TEL. In the middle of the decade, the municipalities' KVTEL (1964) and the state pension act VEL (1967) came into the general earnings-related pension system.[10] Of the seafarers, the icebreakers' officers belonged to VEL, whereas the crew was insured under MEL.

Within the fund, an attempt was made to take into account the special features of the seafarer's work. At the council's annual meeting in 1960, a discussion was held on the periods of temporary unemployment and study typical of the sector, during which the pension right is restricted only to an amount corresponding to the insured person's own contributions. In the council's discussion, it was even proposed that "pensions should be granted on the basis of means testing".[11]

One answer to the problems was the fund's study loans, with which the maritime sector's training — which was developing and extending to the crew — was supported. In addition, MEK acted as a decisive financier in the construction of the maritime vocational schools in Helsinki and Rauma in the latter part of the decade. The council decided in 1961 that at most one per cent of the investment assets could be used for study loans. It had, in addition, been wished that the loan recipient should, after completing studies, have an obligation to serve a fixed time in the domestic merchant fleet, but in the end the intention sufficed. Instead of personal guarantees, guarantee groups were established, because the rather high-quality loans were in demand and were granted in great numbers, to a total of 712 students. When the transition to the state's study grant system took place, the granting of the fund's study loans ended in 1971, but student residences were financed in Rauma and Kotka.[12]

An important opening at the same time, in 1962, with a view to developing the security, was that, on the fund's initiative and with its support, sociopolitical research was begun on the need for seafarers' old-age security, especially as regards the housing question. MEK joined the Federation of Earnings-related Pension Institutions (now Tela), founded in 1964, and the international social security organisation ISSA. Through Tela, entry was gained into, among other things, rehabilitation cooperation, and already in 1968, on MEK's initiative, ISSA's international meeting for those handling seamen's social security was held in Helsinki. At the ISSA meetings abroad there was annual representation.

The establishment of an old people's home in some coastal locality was investigated already from 1960 onwards. From the first study funded by the fund, "The Seafarer's Old-age Security", it emerged that every fifth seafarer was without a dwelling on land. Dwellings for its own pensioners had at that time already been provided by the Pharmacies' Pension Fund. Although the authorities in Naantali, Parainen, Hanko and Tammisaari had shown interest[13], for the seafarers the matter got under way only in the 1970s.

The risks of the social problems were taken into account in the maintenance of working capacity already early on. The misuse of alcohol was seen in 1963 as "a factor increasing pension expenditure". Soon an international meeting on the subject was contemplated. Even in the mid-1960s the importance of the matter was acknowledged, but the then delicate nature of the subject is well described by the decision that "the meeting would not be given publicity".[14]

Rising pension level and the changing structure of seafarers

The MEL scheme, begun cautiously, as if tentatively, was quickly able to achieve considerable monetary improvements for its pension recipients. The pension level, tied to the sector's wages, had already during the first five years of operation raised the paid pensions by 45–5 per cent; the more so the earlier the pension had begun. Likewise, the granted old-age pensions had risen to 200 present-day markkaa a month in 1962, which was on average more than twice as much as the first TEL pensions that began the same year.

The size of the pensions rose along with the rising wage level, so that by 1966 the very oldest pensions, granted in 1956, had risen to more than double. Although the level of the granted and paid pensions improved, owing to the very varied working careers in vessel work the highest pension granted to the crew in 1964 was 264 mk/month, and in the officers 758 mk/month. The emphasis among pension recipients had already shifted to the most numerous part of the insured, that is, the crew.

It is to be noted that, according to a study made of those who belonged to MEK in 1956–63, fewer than one in ten of the total of 22,000 seafarers insured during those years was a woman. Of the number of 233 old-age pension recipients, however, the women were 62, that is, more than every third. The disparity is probably due to the differing average lifespan of the sexes and the then on average late departure for old-age pension. In disability pensions, namely, the ratio between the sexes was the same as among the insured. The sea drew young men to work, but 75 per cent of the women were active on the ships at the age of 40 or older. The men and women on board attended to different tasks, but the work of the stewardess, the waitress or the "pantry girl" (the title of a kitchen worker) was also physical work. As passenger traffic was on a steady rise, the service personnel needed in it increased the number of female insured persons.[15]

A decade after the Fund's establishment

As the general level of the granted pensions improved, the age of transition to old-age pension correspondingly began to decline (see the layout on p. 6). Tuberculosis had by the mid-1960s already shrunk to only one tenth of the causes of incapacity for work, and one recovered from the disease generally in a short time and returned to working life.

MEK sought to support seafarers other than those of the capital region as well. In social housing production, regional fairness was pursued, and steps were taken to build rental dwellings in the important shipowning region of Åland, in Mariehamn, and soon in another large port city, Hamina. In the capital region, the building of rental houses had been continued in the new suburban district of Pihlajamäki already in 1962, and Kauniainen soon came along as a second new site. New housing sites had been started on average every other year.

The fund's personnel too grew in 10 years to seven persons. The office moved to larger premises at Rauhankatu 15. The distinctive line of business and the fund's investment activity required that the functionaries' tasks too be broadened. Director Oravisto familiarised himself with seafarers' working conditions on a couple of weeks' voyage on a cargo ship in 1959 and began to act as the manager of the fund's real estate companies, with "Mrs Tirri as bookkeeper".[16] Despite the growth in the benefits, the number of beneficiaries and the personnel, the management costs had, however, with the exception of the founding year 1956, stayed throughout the first ten years of operation between 1 and 2 per cent. Some shipowners had payment difficulties, but no significant financial losses resulted from them.

As regards persons, one era in the fund ended at the start of 1962, when one of the founding fathers of the MEL act, Teivo Pentikäinen, gave up the board chairmanship after moving from department head at the Ministry of Social Affairs to managing director of the new TEL company, Ilmarinen. The other father, Niilo Wälläri, continued on the board until his death in 1967. Mikko Mannio, who had represented the shipowners on the MEL committee, sat on the board until 1960. Thus the law's preparers bore responsibility for the fund's operations as well for a long time.

_{[1] Ojala & Nevalainen (2019) pp. 176–194; Kaukiainen (2008) pp. 410–485. Turkka (1966) p. 4.}

_{[2] As a general source, MEK's annual reports and the board's minutes. The sums of money have been converted into present-day markkaa of the 1963 currency reform.}

_{[3] MEK board 3 and 6/10/56.}

_{[4] MEK board 4/28/4.12.1956 and 1/21/28.11.1958.}

_{[5] MEK board 3/17/7.8.1956. At the same meeting, the first disability pension was granted to a 64-year-old mate.}

_{[6] Ahtokari (1988) pp. 232–233, MEK board 6 and 7/28/56, MEL act § 27/1956.}

_{[7] E.g. MEK board 1/17/57.}

_{[8] MEK board 5/10/60. This was stated by board chairman Pentikäinen.}

_{[9] Ansioiden mukaan (2012) pp. 117–122.}

_{[10] Ansioiden mukaan (2012) 80–111.}

_{[11] MEK council 1/8/60.}

_{[12] MEK council 8/1/61, e.g. annual reports 1971 and 1976.}

_{[13] MEK board 18/1/61; 7/5/62 (dwellings). 1/27/65 (rehabilitation cooperation). Turkka (1966), Kontio & Yrjänä (2014).}

_{[14] MEK board 6/1/63, 1/3/65 and 4/8/65.}

_{[15] Probably the tasks of passenger traffic drew female labour that no longer had the obligations of a mother of a family, and the shipping companies also favoured experience. Statistical data MEK annual report 1965.}

_{[16] MEK board 3/17/59; 6/6/57.}

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