Finland, Uruguay to sign Social security deal

Finland and Uruguay have started negotiations to conclude a social security agreement between the two countries, said the Ministry of Social Affairs and Health in a press release on Wednesday.

The purpose of the agreement is to facilitate the operation of Finnish companies in Uruguay.

In recent years, an increasing number of Finnish workers have been posted to Uruguay as a result of forest industry investments, for example.

As mobility between the two countries has increased, so has the need to conclude a joint social security agreement.

Currently, Finnish employers are required to pay double pension contributions in respect of workers posted to Uruguay.

However, under the social security agreement now being negotiated, workers posted from one country to the other would be covered by earnings-related pension insurance in the country of origin and they would be exempt from pension contributions in the target country.

In Uruguay, people become eligible for an old-age pension after 30 years of employment in the country. Thus, those who have worked in Uruguay for less than 30 years do not receive earnings-related pension from the country.

Under the new agreement, Uruguay would also take into account any periods of employment in Finland. This would mean that people could be eligible for a pension even if they had not worked in Uruguay for the required 30 years.

The social security agreement would apply to employment-based pensions in both countries and cover both employees and self-employed persons.

The negotiations on the bilateral social security agreement started unofficially last November. The first actual round of negotiations was held in Montevideo in March. Finland’s delegation for the negotiations consists of members from the Ministry of Social Affairs and Health and the Finnish Centre for Pensions.

The next round of negotiations is scheduled to be held in the latter half of 2024. When the negotiations are concluded, the agreement will be brought into force in both countries in accordance with the national procedures concerning the ratification of treaties.