Are individual savings accounts the future of social protection?

“More virtual and more global working has brought along a decrease in traditional employment relationships, and new forms of working. Platform work, virtual work, digital nomads, self-employed people and independent contract partners – they are all characterised by increase of the worker’s responsibility and risks, and social protection that is full of holes,” Head of the Foresight Centre of the Riigikogu Tea Danilov said. “Not everybody can catch up with the rapid changes on labour market. We need a new safety net that would catch the employees that work in new ways and those who need supporting. If an increasing share of workers do not automatically qualify for health insurance and pension relating to working, how can this be solved?”

In the opinion of Expert of the Foresight Centre Johanna Vallistu, one possibility is to use individual accounts, or the so-called life accounts that are not connected with specific employment relationship, in social protection. “The Estonian business account can be used as an excellent and simple example here: all income from different jobs is collected on a person’s business account, it is taxed according to a determined rate, and if it exceeds a certain threshold, you also get health insurance,” Vallistu noted. “Savings accounts have been used in social protection for some time across the world. Health accounts, education accounts and pension accounts have been created, but there are few integrated solutions that would help people to adapt to the changing labour market on a long-term basis.”

At the webinar, member of the Finnish Parliament Elina Lepomäki introduced the life account and the social protection reform in Finland, and lecturer of labour law Dr Nicole Maggi-Germain from Paris 1 Panthéon-Sorbonne University outlined the experience of France in introducing activity account and the idea of connecting social rights with individuals.

Member of the Riigikogu Riina Sikkut and Chairman of the Foresight Council Jaan Pillesaar also participated in the discussion. The discussion was moderated by Johanna Vallistu, Expert of the Foresight Centre. The video recording of the webinar can be viewed below. 

Speaker Bios
Elina Lepomäki is a Member of The Finnish Parliament and vice-chair of the center-right National Coalition Party. Prior to entering politics, she worked 10 years in the financial sector in London (Royal Bank of Scotland) and the Nordics (Nordea). Her latest title was Director in Global Banking and Markets at RBS. Lepomäki is M.Sc. in Technology (Computer Science) and M.Sc. in Financial economics; with doctoral studies in applied mathematics. Early in her career, she programmed an artificial intelligence solution for the financial sector: a neural network for forecasting the term structure of interest rates (2005). In 2018, she published her book „Vapauden Voitto“ (Otava), on reforming the Nordic welfare model. She has co-authored several societal reports such as „The Future of the Euro − The alternatives for Finland“ (2014) and „The Life Account − A Social Security Reform“ (2013).

Nicole Maggi-Germain is a specialist of labor law, senior lecturer qualified to the functions of professor at the University of Paris I, Panthéon-Sorbonne, and the director of the Labor Studies Institut (ISST). In 2018−2020, she was part of Harvard International Advisory Group in charge to provide expertise on the project „Rebalancing Economic and Political Power: A Clean Slate for the Future of Labor Law“ − Labor and Worklife Program / Harvard Law School, USA.
She is a researcher at the Laboratory Droit et changement social and a member of the Maison des Sciences de l’Homme Ange Guépin, Nantes. Her main fields of research are vocational training, labor relationship in the public sector, health at work. She is currently working on the legal and anthropological issues surrounding robotics and artificial intelligence. She directed an international scientific book for the Centenary of the ILO to be published at the end of April (L’impact des normes de l’O.I.T. sur la scène internationale, Acte du colloque pour le Centenaire de l’Organisation internationale du Travail, Univ. Paris 1 (ISST et Iredies) 23/24 sept. 2019, éd. Mare & Martin, 328 p.)