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Earnings-related pension

Earnings-related pension is paid to a person who has accrued pension according to his or her earnings either in an employment relationship or as an entrepreneur. The size of the earnings-related pension is determined according to the person’s earnings. There is no upper limit in euros for the pension.

The earnings-related pension scheme is based on several acts. The pensions acts can be found on page

How is earnings-related pension accrued?

In the earnings-related pensions scheme, employees accrue old-age pension from work performed from the age of 17 and entrepreneurs from work performed from the age of 18.

Pensions are calculated from the annual earnings, for entrepreneurs from the annual confirmed earned income.

The amount of pension accrued from the complete annual salary is 1.5 per cent. However, between 2017 and 2025, persons aged between 52 and 62 will accrue pension at a slightly higher percentage, 1.7 per cent per year. The pension accrued from work by a person who has already retired is 1.5 per cent.

The accrual of pension ends when the person reaches the age limit for the insurance obligation, which is 68 for those who were born in 1957 and before that, 69 for those born between 1958 and 1961, and 70 for those born after that.

Pension is also accrued from earnings based on earnings-related social security benefits, such as sickness allowance. In addition, pension is accrued from studies leading to a qualification or a degree and during the home care of a child aged under 3.

If you do not retire on old-age pension as soon as you reach the age of old-age pension, there will be a deferment increase of 0.4 per cent in the accrued pension for each postponed month, which is 4.8 per cent per year.

Earnings-related pension providers in the private sector send an extract from the earnings-related pension records to the insured person every three years. It can be used to monitor the accrual of the pension. It is also possible to get the extract from the pension provider electronically. Those who work in the public sector get the extract from the earnings-related pension insurance records from Keva’s My Pension online service.

Retirement age is determined by the birth year

You can retire on old-age pension based on the earnings-related pension insurance scheme once you have reached the lowest age for old-age pension, determined by your birth year.

For those who were born in 1965 and after that, the age limit for retirement has been linked to the development of life expectancy, so that part of the expected extension of life would in future be used for working. As from 2030, there will be an annual rise of two months at the most in the retirement age.

Old-age pension does not have to be taken as soon as you have reached the lowest age for it. If you do not take old-age pension when you reach the age required for it, it is possible to get a deferment increase, which is 0.4 per cent for each postponed month.

Partial early old-age pension makes it possible to take some of the accrued earnings-related pension before retirement. The person taking partial early old-age pension can choose to take either 25 or 50 per cent of his or her pension as partial early old-age pension. If partial early-age pension is taken before the personal lowest retirement age, the amount of the pension will be permanently reduced by 0.4 per cent for each month it has been brought forward. The early commencement reduction is permanent and affects the amount of the pension also after the person has retired.

The lowest age for partial early-age pension is 61 for those born in 1963 and before that, and 62 for persons born in 1964. For those born in 1965 or after that, the age limit for partial early old-age pension is three years lower than the lowest retirement age for old-age pension.

The years-of-service pension enables those employees and entrepreneurs who have had a long career in work that requires great mental or physical effort to retire slightly before the actual retirement age for old-age pension. For the years-of-service pension, a career of at least 38 years in mentally or physically strenuous work and reduced capacity for work is required.

The lowest age for year-of-service pension for those born between 1955 and 1964 is 63 years. For those born in 1965 or after that, the lowest age for years-on-service pension is two years lower than the lowest retirement age for old-age pension.

Pensions must be applied for

All pensions must be applied for. The application for an earnings-related pension should be addressed to the pension provider in which the person’s earned income has been insured most during the past two calendar years. The same pension insurance institution sends the pension decision to the applicant and pays the pension. The decision includes the pensions both in the private and the public sector.

Entrepreneurs and farmers insure themselves

Entrepreneurs are obligated to insure themselves in accordance with the Self-employed Person’s Pensions Act (YEL). The pension insurance of entrepreneurs is based on the earned income under the YEL insurance. Pension benefits, unemployment allowances and YEL contributions are all determined based on the earned income.

The Finnish Centre for Pensions supervises the earnings-related pension insurances of entrepreneurs.

Farmers, forest owners, reindeer breeders and commercial fishermen and their family members who work with them insure themselves according to the Farmer’s Pensions Act (MYEL).

The MYEL insurance is based on the MYEL earned income. The pension benefits, unemployment allowances and insurance contributions are all determined according to the earned income.

Advice and instructions for applying can be obtained from the Finnish Centre for Pensions and earnings-related pension providers

Advice, instructions for applying and the application forms for all pensions can be obtained from the Finnish Centre for Pensions. You should primarily contact your own earnings-related pension provider in matters related to earnings-related pensions.

More information is also available in the joint online service of the earnings-related pension sector:

A decision on earnings-related pension can be filed to the Pension Appeal Board

A pension decision always includes instructions for appealing. Decisions on earnings-related pensions can be appealed to the Pension Appeal Board.

The Ministry of Social Affairs and Health does not handle appeals or complaints.

 

Yhteystiedot – Yhteystietonosto

Pirjo Moilanen, Ministerial Adviser 
Ministry of Social Affairs and Health, Sosiaaliturva- ja vakuutusosasto / SVO, Eläke- ja yksityisvakuutusyksikkö / EVY 0295163183  


Erik Strömberg, Senior Counsellor 
Ministry of Social Affairs and Health, Sosiaaliturva- ja vakuutusosasto / SVO, Eläke- ja yksityisvakuutusyksikkö / EVY 0295163190  

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