Amount of pension
Pension accrues at a rate of 1.5% per year starting at the age of 17. The longer you keep working, the higher your pension will be.
If you choose to retire before your retirement age, the amount of your pension will slightly decrease. If you choose to keep working even after reaching the lowest age of eligibility for old-age pension applicable to your age group, your pension will be increased by 0.4% for each month of the deferment in what is known as a ‘deferment increment’.
Your pension record shows you how much pension you will receive. The record is updated annually. You can review your pension record in the online service My Pension (available in Finnish and in Swedish).
When you are planning on retirement, the calculators in the online service My Pension let you see how much pension you would receive at different ages of retirement.
Pension may accrue for unpaid periods such as alternation leave or studies leading to a degree. Pension also accrues during periods of unemployment on earnings-related unemployment allowance.
Factors affecting amount of pension
The factors affecting the amount of pension and its accrual in the public sector have varied depending on the year.
At the start of 2017 earnings-related pension starts accruing at the age of 17.
In the years 2005 - 2016 pension started to accrue at the age of 18.
Up to the end of 2004, earnings-related pension started to accrue at the age of 23.
Pension accrual depends on salary. This means that a higher salary will accrue a proportionately higher pension than a lower one. All earnings are included in the calculation of pension. Pension does not accrue on capital income, however.
Pension is calculated for each calendar year separately on the basis of the accrual rate.
As of 2017, the pension accrual rate is 1.5% of annual earnings.
For those aged 53–62, the accrual rate is 1.7% per year.
Life expectancy coefficient
Since 2005, the life expectancy coefficient has had the effect of reducing the pension of people born in or after 1948.
Duration of employment
How long you work has a direct effect on the amount of your pension. The longer you have worked, the higher the accrued pension, and vice versa.
A pension cap applies to pensions which have accrued up to the end of 2004. In other words, pension is made up of two components: the pension that has accrued up to the end of 2004 and the pension accruing after the start of 2005.
Life expectancy coefficient
Life expectancy coefficient determined separately for each age group The life expectancy coefficient affects the amount of your old-age pension. The coefficient is determined separately for each age group at the age of 62.
Your old-age pension will be multiplied by the life expectancy coefficient regardless of the age at which you retire on old-age pension. The coefficient will remain the same for as long as you draw pension.
The coefficient helps control the rise in pension expenditure due to longer life spans. The coefficient may reduce your pension if the average life expectancy keeps rising.
Discretionary review of pensionable salary
A discretionary review of pensionable salary may be carried out if your earnings have decreased considerably because of an exceptional reason such as long-term illness. The review may result in the salary which forms the basis for the pension being increased for the duration of the exceptional circumstances.
The review only applies to public sector employment in the years 1995–2004. Your employment must have been in effect during the decrease in earnings.
You can request a discretionary review of your pensionable salary either before or in the context of applying for pension by submitting a request to this effect. No formal requirements apply to the request but it must indicate the duration and reason of the decrease in earnings.