Pensions secure the income of retirees

In Finland, you accrue pension for all your earnings, as long as your pension insurance contributions have been paid. Your pension record shows what work has accrued pension. You should review your pension record to verify the information. You can check your record on the Työeläke.fi website of the Finnish Centre for Pensions. 

The Finnish pension system includes multiple types of pension. Earnings-related pensions are accrued for gainful employment. The self-employed (entrepreneurs) pay all of their contributions. Earnings-related pensions are paid by the employment pension institutions. Read more about the Finland’s pension system. 

If your earnings-related pensions are small or non-existent, you can receive the national pension or the guarantee pension from Kela. The national pension’s benefits include old-age pension, disability pension, rehabilitation benefits, and survivor’s pension for spouses and children.  

This article covers all pension benefits except survivor’s pension. To learn more about survivor’s pension, you can visit the Kela website.  

Earnings-related pension benefits secure your income  

The purpose of earnings-related pensions is to secure a reasonable income for retirees.  

Because the pension is based on earnings, the amount varies between recipients according to their pay, years worked, etc. The final amount of pension is also influenced by the wage coefficient, which is used to adjust working life earnings, and the life expectancy coefficient, which is used to adjust pensions for higher life expectancies. Naturally, your pension is subject to the legislation in effect during your working life. 

The benefits of the earnings-related pension system include old-age pension, partial early retirement pension, disability pension and rehabilitation benefits, years-of-service pension, and survivor’s pension for spouses and children. Part-time pension was removed by the 2017 pension reform, replaced by partial retirement pension. 

Old-age pension 

Workers may retire to enjoy their old-age pension once they have reached their earliest retirement age. The retirement age varies by year of birth. You can check your retirement age with the Finnish Centre for Pensions’ online calculator. 

Old-age pensions are paid as a type of earnings-related pension. If your earnings-related pensions are small, Kela can supplement them. 

The amount of old-age pension is based on the pensions earned during working years, amount of pay, and accrual rate. The longer you work before retiring, the more pension you accrue and receive. 

Before you may retire, your employment relationship must end. Your employment is terminated with the standard period of notice. 

Partial old-age pension 

In partial old-age retirement, you withdraw some of your accumulated earnings-related pension before fully retiring. 

Partial old-age pension allows reduced working hours, making part-time work possible before a full retirement. However, part-time work is not a requirement for partial old-age pension. This means that the recipient may stop working altogether or continue working as before.  

Currently (in 2021 at the time of writing), people who have turned 61 are eligible to receive partial old-age pension. The age limit varies according to year of birth as follows: 

• for people born in 1964, the age limit for partial old-age pension is 62 years, and 
• for anyone born after 1964, the age limit is three years before their earliest old-age retirement age. 

The recipient decides whether to withdraw 25 or 50 per cent of their accumulated pension as partial old-age pension. 

If you start a partial old-age retirement before your earliest old-age retirement age, this will reduce your pension. Your pension is permanently reduced by 0.4 per cent for every month up to your earliest old-age retirement age. A further reduction is made according to the life expectancy coefficient. 

Years-of-service pension 

The years-of-service pension is a new pension benefit introduced by the 2017 pension reform. Requirements for years-of-service pension: 

• age (born in 1955 or later) 
• long service (minimum 38 years) 
• heavy and burdensome work 
• permanently reduced work ability (physician’s evaluation and statement). 

The years of service include various career interruptions such as maternity, paternity, and parenthood allowance periods (maximum three years), and minor absences due to illness, lay-offs, or unemployment. 

The years-of-service pension requires that the applicant suffer from a reduced ability to work, but the requirements may be different from those of disability pension. The employer’s description of the work and a physician’s statement of the applicant’s health and the content and burdensome nature of their work are enough justification for years-of-service pension. 

Disability pension and rehabilitation benefits 

Benefits for those unable to work include disability pension, partial disability pension, rehabilitation benefit, partial disability benefit, rehabilitation allowance, and partial rehabilitation allowance. 

Kela handles the payments if the recipient’s occupational history is too short to qualify them for unemployment pension and rehabilitation benefits from their pension insurance company. The criteria for disability pension and rehabilitation benefits are the same regardless of whether paid by Kela or personal employment pension insurance. The only difference is that Kela’s national pension benefits are the same for all recipients whereas employment pension insurance benefits are earnings-related.     

For a full disability pension, the loss of work ability caused by an injury or illness must be 3/5 at a minimum. Disability pension may be paid as employment pension or national pension. Read more about disability pension on the Kela website. 

For a partial disability pension, the loss of work ability caused by an injury or illness must be 2/5 at a minimum and last for over a year. Disability pension is converted into old-age pension once the recipient reaches their retirement age. 

Rehabilitation benefit is a type of disability pension with a fixed term. Typically, rehabilitation benefit is paid if the person can recover from their injury or illness with rehabilitation in a certain time period. A care and rehabilitation plan is required to receive the rehabilitation benefit. Before granting disability pension, the employment pension insurance company will typically investigate the person’s potential for keeping their job or returning to work with the help of occupational rehabilitation. The amount of rehabilitation benefit is equal to disability pension. Read more on the Kela website: Disability Pension and Rehabilitation Benefit. 

Full and partial rehabilitation allowance is available for people in rehabilitation ages 16–67. Read more about the Kela rehabilitation allowance. 

Pension benefits for the elderly long-term unemployed 

Additional days of basic unemployment allowance 

People over 58 years of age may receive unemployment allowance for a maximum of 500 days. People who are elderly and have been out of work for a long time may be entitled to additional days of unemployment allowance, also known as the “pension pipeline” (eläkeputki). In this case, basic or earnings-related unemployment allowance is paid until the recipient is eligible for old-age pension. 

For more information about the additional days, see the  

• Kela website  
• PAM unemployment fund’s website. 

A new law has entered into force on 1 January 2023 that will eliminate the “pension pipeline”. The entitlement to additional days of unemployment allowance will be gradually removed by 2030. In practice, this means that people born in and after 1965 are not eligible for additional days of allowance. 

Pension assistance 

Pension assistance is intended for people who are elderly and have been out of work for a long time but are ineligible for basic or earnings-related unemployment allowance. 

Pension assistance is available to people who live in Finland, are at least 60 years of age, and have been unemployed for at least five consecutive years. The unemployment period also includes sickness allowance days and rehabilitation benefit days, for example. 

Pension assistance is available by application from Kela, and it is equivalent to the guarantee pension (€922.42/month in 2023). Pension assistance will be paid until the retirement age stipulated by the National Pensions Act, 65 years, or until the recipient applies for earnings-related pension or partial old-age pension. 

You can read more about pension assistance and its criteria on the Kela website. 

Activities for the elderly 

There are many organisations that provide activities for the elderly. Aside from promoting the interests of the elderly, their dedicated interest groups organise activities around the country. Read more about the associations of the elderly (in Finnish) and participate! 

See also 

• Pensions (Kela) 
• Finland’s employment pension system explained