Pension benefits

The retirement age will gradually rise as of 2017. The new age limits apply to those born in or after 1955.

People born before 1955 can transfer to old-age pension in accordance with current legislation at the age of 63–68 years.

You can also continue working while on old-age pension. Working while receiving pension accrues new pension at a rate of 1.5 % a year. You must apply separately for the new accrued pension.

Pension benefits

Old-age pension

The old-age retirement age will rise gradually beginning in 2017. The new age limits will apply to persons born in or after 1955. The lower age limit for old-age pension will be increased by three months per year until it is 65 years. The upper age limit for old-age pension will also rise gradually.

For persons born in 1955–57, the upper age limit for old-age pension is 68 years, 69 years for those born in 1958–61 and 70 years for those born in or after 1962.

You can also continue working while on old-age pension. Working while receiving pension accrues new pension at a rate of 1.5% a year.

Partial old-age pension

In 2017, it will be possible to draw partial old-age pension at the age of 61 at the earliest. For persons born in 1964 or thereafter, the age limit is 62 years.

Partial old-age pension can also be deferred, i.e. drawn after reaching the lower age limit for old-age pension.

Eligibility for partial old-age pension will not require terminating your employment relationship or reducing your work input.
New pension will accrue from work performed while on partial old-age pension, and this pension will be paid when applying for old-age pension.

Of the accrued pension, 25 or 50 per cent can be paid as partial old-age pension.

Part of the partial old-age pension applies the early retirement penalty, which is 0.4 per cent for each month before the actual old-age retirement age. The reduction is permanent and impacts the size of the monthly pension for the entire pension period.
Example: If half of the EUR 1,000 accrued pension, i.e. EUR 500, is paid out exactly one year (12 months) before the lower old-age retirement age, the pension is reduced by 12 x 0.4% = 4.8%, i.e. EUR 24. The pension is also adjusted with the life expectancy coefficient.

You are entitled to partial old-age pension also when you receive unemployment allowance.

Disability pension

​You are entitled to disability pension if your working capacity has declined due to illness or injury.Disability pension or the cash rehabilitation benefit can be granted to a person aged 18–62 whose working capacity has declined due to illness or injury for at least a year.

Disability pension can be either full pension (working capacity lowered by at least 3/5) or partial pension (working capacity lowered by at least 2/5). Partial pension is fifty per cent of the full disability pension. You can apply for a preliminary decision about your right to partial disability pension. At the same time you will also receive an estimate of the amount of your partial pension as well as information about how much you can earn while on partial pension.

Your treating physician always has to establish lowered working capacity and fill out the ‘B’ medical statement for disability pension. The pension company will process the disability pension application, taking into account every issue that affects whether or not the pension will be granted. In addition to your state of health, other factors such as education, previous activity, age, and living conditions will be taken into account in the assessment of your working capacity.

Disability pensions include

  • cash rehabilitation benefit (fixed-term disability pension)
  • partial cash rehabilitation benefit
  • disability pension
  • partial disability pension.

Disability pension will be discontinued, if your working capacity recovers. Once you reach retirement age, your disability pension will become old-age pension of an equal amount.

Survivors` pension

In the event of the death of an employee or pension recipient, survivors’ pension can be received by their widow/widower or their registered partner and children under 18. Common-law marriage does not entitle the spouse to survivors’ pension.

Survivors’ pension is calculated on the basis of the earnings-related pension of the primary beneficiary. The total amount of the survivors’ pension cannot exceed the amount of the earnings-related pension of the primary beneficiary.

Surviving spouse’s pension
If you are left a widow/widower, you are entitled to surviving spouse’s pension provided that you entered into marriage with the primary beneficiary before he/she reached the age of 65.
A widow/widower can receive surviving spouse’s pension if the spouses have or had a mutual child.

A childless widow/widower can receive surviving spouse’s pension if the following conditions are met:

  • The widow/widower must be at least 50 at the time of the spouse’s death or must have been receiving his/her own disability pension for at least three years
  • The marriage was entered into before the widow/widower reached 50 years of age.
  • The marriage lasted for at least five years.

The surviving spouse’s pension is at maximum 50 % of the primary beneficiary’s pension. The pension entitlement of a registered spouse of the same sex as the primary beneficiary corresponds to a widow’s/widower’s entitlement to pension. A former spouse is entitled to pension if the primary beneficiary was required to pay maintenance to him/her.

Child’s pension
A child receives a pension if she/he is less than 18 years old. The entitlement applies to the primary beneficiary’s own child, adopted child or a widow’s/widower’s child who was living with the primary beneficiary at the time of his/her death. After the death of one of the partners of a registered partnership, the child of the surviving partner receives child’s pension if she/he was living with the partners.

A child’s pension will terminate once he/she reaches 18 or if he/she is given up for adoption.After the age of 18, a child does not receive child’s pension even on account of studies or disability.

A separate application form is filled in for each survivors’ pension applicant. ​

Years-of service pension

A person born in or after 1955 can receive a years-of-service pension and the pension cannot begin before 1 February 2018.
Employees and self-employed persons are entitled to years-of-service pension once they turn 63, if they have worked for at least 38 years in a strenuous and wearing job and their work ability has weakened due to an illness, defect or injury.

Applying for years-of-service pension
A statement from occupational health care services and a description by the employer of the work and work conditions are required as an attachment to the years-of-service pension application. Your own pension institution makes the decision based on the application.

The time period between the ending of the employment relationship or self-employment and applying for a pension cannot be more than one year. The amount of years-of-service pension is the pension earned by the end of the month preceding the start of the years-of-service pension.

The length of the career is calculated based on the information in the earnings-related pension register and the accounts provided by the pension applicant. The duration of the work includes a maximum of three years of maternity, paternity and parental allowance periods.

Vocational rehabilitation

​Vocational rehabilitation helps you to remain in or return to working life in spite of illness or injury. Vocational rehabilitation helps in preventing disability and improves your working capacity if your health has become impaired and you have difficulty carrying out your work.

Vocational rehabilitation within the earnings-related pension scheme means vocational rehabilitation provided and funded by earnings-related pension companies. It is targeted at employees or self-employed persons who have been in working life for almost their entire adult life and who have professional skills acquired through training or work.

Pension for the self-employed

YEL insurance is the basis of a self-employed person’s pension cover.Correctly dimensioned self-employed persons’ pension insurance secures your income during retirement.

YEL insurance also provides security in the event of a decrease in income due to disability, unemployment or the death of a family provider. As a self-employed person, you are also entitled to vocational rehabilitation if you are at risk of becoming incapacitated for work due to illness or injury. YEL insurance offers self-employed persons the same comprehensive cover and guarantees the same rights as TyEL insurance does for employees.

A self-employed person’s pension is calculated from their YEL confirmed income. Earnings-related pension accrues for a self-employed person for work carried out between the ages of 18 and 67 according to the same percentages as for an employee.

Read more about YEL insurance