Once your employer has hired you in Finland, he or she must take out pension insurance for you.
Pension earned in Finland can be paid to a pension recipient living abroad.
Earnings-related pension secures your income in the event of old age, disability or your spouse’s death. It entitles you to vocational rehabilitation if illness or injury jeopardises your working capacity.
All private-sector employees aged 17–67 working in Finland are insured under the Employees Pensions Act (TyEL).Foreign workers are also insured in the same way as Finns are.The nationality of the employee or employer has no relevance.
However, wages and salaries below EUR 58.19 per month are not subject to TyEL contributions.
An exception to the obligation to provide insurance is a posted worker holding a certificate of posting from another country, or a person working simultaneously in several countries.
For more information about insuring a posted worker, please contact the Finnish Centre for Pensions.
Insuring an employee in Finland and in the EU countries
An employee is insured in the country of employment in accordance with the legislation of the country in question. This general rule is subject to a few exceptions. People working in Finland are usually insured in Finland and people working abroad are insured in the country of employment.
In EU and EEA countries, Switzerland and social security agreement countries:
- an employee is covered by social security in his or her country of employment under the same conditions as those applied to the nationals of the country
- he or she is only insured in one country
- when calculating insurance years and qualifying periods, employment in other agreement countries is taken into account if required.
Finland has concluded a social security agreement with the Nordic countries, the United States, Canada, Chile, Israel and Australia.
This is how pension accrues in Finland
As of the beginning of 2017, employees and entrepreneurs will accrue pension on earned income at a rate of 1.5 per cent per year. Due to the transitional provision, the pension accrual for people aged 53–62 years is 1.7 per cent of the earned income. This age group also has 1.5 percentage point larger YEL contributions.
Pension accrual until 31 December 2016
Until the end of 2016, employees and self-employed person’s pension has accrued on earned income per year at a rate of
- 1.5% for those aged 18–52
- 1.9% for those aged 53–62
- 4.5% for those aged 63–67