(Amounts in EUR 1,000) 2016 2015
Salaries and other remuneration 24,299 25,196
Social security and employee insurances 2,793 2,322
Pensions 7,412 7,739
Other personnel expenses 3,197 3,071
Gross personnel expenses 37,700 38,328
Host country reimbursement according to agreement with the Finnish Government -9,064 -8,403
Net personnel expenses 28,637 29,925

The personnel expenses include costs for the Board of Directors and the Control Committee. In 2015, an extra provision of EUR 2 million was reserved for the purpose of planning, training and adapting to the changing banking industry requirements.

Number of employees in permanent positions 2016 2015
Average number of employees 192 188
Average age of employees 47 47
Average period (years) of employment 12 12
Distribution by gender as of 31 Dec    
All employees 195 189
Female 85 82
Male 110 106
Executive Committee (including the President)    
Female 1 1
Male 6 5
Professional staff    
Female 67 60
Male 99 92
Clerical staff    
Female 17 21
Male 5 9

The figures in the table above comprise of staff in permanent positions including the President.

Compensation for the Board of Directors, the Control Committee, the President and the Executive Committee

Compensation for the Board of Directors (BoD) and the Control Committee (CC) is set by the Board of Governors (BoG). The compensation consists of fixed annual remuneration and an attendee allowance. The members of the BoD and the CC are also entitled to reimbursement of travel and accommodation expenses and a daily allowance in accordance with the Bank’s travel policy.

The BoD decides on the appointment and remuneration of the President. As a rule, the President is appointed on a fixed-term contract for five years at a time, but the existing contract can also be prolonged for a shorter period. The current President’s contract commenced on 1 April 2012 and was due to expire on 31 March 2017, however the contract has been extended until 31 March 2020. The President decides upon the employment of the Executive Committee (ExCo) members. The members of the ExCo are normally employed for an indefinite period of time. The period of notice is six months. The President is authorised by the BoD to make decisions regarding compensation within the scope of the Staff Policy, Staff Regulations and the Financial Plan. The remuneration package for the members of the ExCo includes a fixed base salary and customary taxable benefits, which are in principle the same for all staff at the managerial level. In addition to this remuneration package, the members of the ExCo enjoy other benefits common to all staff (e.g. health care, supplementary group pension, insurance coverage and staff loans). The Bank can pay performance premiums of up to three months’ salary for excellent and extraordinary performance and are presented in the table below if awarded. The maximum cost for the Bank of performance premiums is a total of 3% of the estimated salary costs.

Salaries and other remuneration in EUR 1,000 2016 2015
Board of Directors (remuneration and attendee allowance)    
Chairman 15 15
Other Directors and Alternates (15 persons) 86 90
Control Committee    
Chairman 5 5
Other members (9 persons) 17 19
President 751 705
Members of the Executive Committee (6 persons) 2,447 2,386
Other staff 20,978 21,976
Total 24,299 25,196

The executive committee comprised of five persons during the period from 1 October 2014 to 31 March 2015.

Pension obligations

NIB is responsible for arranging pension security for its employees. The current pension arrangement consists of pensions based on the Finnish state pension system (VaEL Pension) as the basis for the pension benefits. The VaEL Pension is calculated on the basis of the employee’s annual pensionable income and the applicable age-linked pension accrual rate. The employer’s pension contribution in 2016 was 15.85% of the pensionable income. The employee’s pension contribution was either 5.70% or 7.20%, depending on the employee’s age. NIB pays this contribution for its permanent staff, and it is taxed as a benefit for the employee. The State pension is accounted for as a defined contribution plan.

In addition to the VaEL Pension, the Bank has taken out a supplementary group pension insurance policy for all its permanently employed staff, including the President. This pension insurance is based on the principle of a defined contribution. The insurance premium, 6.50%, is calculated on the basis of the employee’s taxable income and paid until the age of 63. The supplementary pension is also accounted for as a defined contribution plan

The employer’s pension contribution regarding the President amounted to EUR 216,057 (219,706) of which EUR 42,964 (40,164) comprised supplementary pension premiums. The corresponding figures for the ExCo members were EUR 811,950 (823,084) and EUR 266,495 (251,342) respectively.

Staff loans

Staff loans can be granted to permanently employed staff members who have been employed by the Bank for a period of at least one year. The staff loans are granted by a commercial bank, subject to a recommendation from NIB.

At present, the maximum loan amount is EUR 200,000. The employee pays interest on the loan in accordance with the official base rate established by the Ministry of Finance in Finland or 0.25% whichever is the higher. The same interest rates, terms and conditions are applicable to all the employees of the Bank, including the President and the ExCo members.

As of 31 December 2016, there were no (-) outstanding staff loans to the President or the ExCo members.

Additional benefits for expatriate personnel

Professional staff (including Executive Committee members) who move to Finland for the sole purpose of taking up employment at the Bank are entitled to certain expatriate benefits, such as an expatriate allowance and a spouse/family allowance. In addition, NIB assists the expatriate in finding accommodation, usually by renting a house or a flat in its own name. The staff member reimburses the Bank for a part of the rent, which is equal to at least the taxable value of the accommodation benefit established annually by the Finnish National Board of Taxes.

Host country reimbursement

According to the Host Country Agreement between the government of the Republic of Finland and the Bank the amount of tax withheld in advance on the salaries of the Bank’s staff and the final tax on salaries collected shall be repaid to the Bank. Amounts repaid contribute to the surplus the Bank may distribute among the member countries.