A local government pension accrues for work performed for a local government employer as well as for many social benefits.
Pension accrual since the beginning of 2005
Your pension accrues from all income earned between the ages of 18 and 68.
Your pension accrues by
- 1.5% of your annual earnings between the ages of 18 and 52.
- 1.9% of your annual earnings between the ages of 53 and 62 (2% for those born before 1950)
- 4.5% of your annual earnings between the ages of 63 and 67.
You can use the pension calculator to estimate how much old-age pension you can accrue by continuing at work after the age of 63.
For the work you perform while on a pension you accrue 1.5% of your annual earnings regardless of your age. Pension accrual ends after turning 68.
Pension has accrued from social benefits since 2005
Pension is also accrued from many social benefits. Pension accrues annually on the following social benefits at 1.5% of the earnings on which the social benefits are based, regardless of age:
- maternity, paternity and parental allowance (117% of the earnings used to calculate the daily allowance are counted as earnings)
- earnings-related unemployment allowance (75% of the earnings on which the allowance is based are counted as earnings)
- job alternation leave compensation (55% of the earnings on which the compensation is based are counted as earnings)
- earnings-related training allowance for the unemployed, rehabilitation allowance, sickness allowance, accident and motor liability insurance compensation (65% of the earnings on which the compensation is based are counted as earnings)
- as a student if you are studying for a university or university of applied sciences or vocational degree (your pay is seen to be 644.57 euro/month at the 2010 level)
- childcare leave for children under 3 years (your pay is seen to be 644.57 euro/month at the 2010 level).
In order to be granted the pension accrued from social benefits you need to have earned an income equal to at least 15,470.09 euro (2010 level) before you retire.
Pension accrual until 31.12.2004
- Before the year 2005, pension accrued differently depending on whether your employment relationship had begun before 1993 or on 1 January 1993 or after this date.
- Pension was calculated separately for each employment relationship.
- Pension began to accrue when the employee reached the age of 23.
Local government employment relationships which began before 1 January 1993 and which continued or will continue uninterrupted until retirement, accrued pension at a rate of
- 2.2% annually until 31 December 1994
- beginning 1 January 1995
- 1.5% per year
- 2% per year after turning 55.
Local government employment relationships which began on 1 January 1993 or later accrued pension at a rate of
- 1.5% annually until the age of 55
- 2% per year after turning 55.
Effect of length of employment relationship on pension accrual
- beginning 1 July 1971 or after this date, pension was accrued for employment lasting at least one month
- beginning 1 January 1998 or after this date, pension has accrued for each workday.
Pension which has accrued until the end of 2004 has a personal maximum amount. For further information go to "Determining the total pension".
Pension accrual for projected pensionable service
Projected pensionable service means the period from the pension contingency year to the age of 63. Pension contingency means, for example, the onset of disability.
The projected pensionable service increases the amount of pension you receive because the pension is calculated as though you were going to continue in working life until the age of 63 (or a lower old-age pension retirement age). The projected pensionable service period is the time from the start of the year during which the disability began to the age of 63, or if your personal retirement age is lower, then the lower retirement age.
The projected pensionable service will be taken into account in disability pensions.
Projected pension rights apply to your disability pension if you have, during the past 10 years, earned the minimum amount under the earnings-related pension acts, which at the 2010 level is 15,470.09 euro.
Your earnings for projected pensionable service are determined based on your earnings from the five years preceding the onset of disability.
When the pension contingency has taken place on 1 January 2006 or after, the accrual for the projected pensionable service is
- 1.5% annually until the age of 50
- 1.3% annually between the ages of 50 and 63 (projected pensionable service is taken into account up to 63 years of age or a lower occupation-specific old-age pension retirement age).
