At the beginning of your career, you may feel that retirement is so far away in the future that it is not worth thinking about. However, employment pension contributions are paid from every pay we earn since the age of 17. The employment pension therefore keeps slowly accruing throughout your working life. Pension is also accrued for instance during studies, unemployment and home care for children.
The Finnish pension system was built so that working people primarily pay the pensions of the retired. Part of the money collected for pensions is, however, transferred to reserves for the future. The system guarantees livelihood in old age as well as in case you are incapable for work.
Familiarize yourself with pensions already when you are young, as the choices made in your career will affect the amount of your pension.
What is employment pension?
The basic principle is that employment pension is earned by your own paid work or business. Nowadays, the pension starts to be accrued already at the age of 17. Pension can, however, be also partly accrued from studies and during unemployment, sickness benefit and parenthood allowance.
Learning about the pension system pays off also because working people always pay the majority of the retired people’s pensions with their employment pension contributions. Furthermore it is worth noting that you can already be entitled to disability or survivor’s pensions at a young age. Read more about the difference between employment pension and national pension here.
Other pension benefits
Employees can go on a partial retirement pension (25% or 50%) already at the age of 61. This is called the partial early old-age pension.
For people born in 1964 the limit will increase to 62 years and for people born in 1965 and after the minimum age limit is adjusted to the change in life expectancy.
Working career pension is a type of pension targeted to employees in the age of at least 63, enabling retirement to those with a long and wearing career before the minimum retirement pension age.
Long and wearing work history is defined as careers that have lasted over 38 years and after which your ability to work is deteriorated. However, the deterioration is less severe than with those receiving disability pension.
You can retire on old-age pension at the minimum retirement pension age of your age class. The year of birth affects the time when you can retire.
Employees are not obliged to apply for pension, even if they have reached their retirement age. The later you retire, the higher your pension will be.
Disability pension is paid if the ability for work is reduced for at least a year due to a disease or injury. The precondition for granting a full disability pension is that the ability for work is deteriorated by at least 60 per cent.
They disability pensions can be paid as a non-fixed term or a temporary disability pension.
After the death of a family provider, the widow and children can receive a survivor’s pension to safeguard their livelihood. Survivor’s pensions include a widow’s pension and a child’s pension.
You can receive rehabilitation benefits for the duration of vocational rehabilitation. The aim of vocational rehabilitation is to improve coping at work, improve the ability for work and to increase vocational skills. Benefits of the employment pension rehabilitation include the rehabilitation allowance, the rehabilitation increment and the rehabilitation assistance.
Pension record
The pension record contains information of your accrued earnings. Your future pension may be based on this information. You should check the information on your pension record regularly, but it will not state you final pension. Pension is accrued throughout you career, so the more working years you have to come, the more pension will still be accrued. You can check your own pension record at www.työeläke.fi.
There you can also view the estimate of your retirement age and the date when you retirement will begin. For example, if you were born in 2002, according to the calculator your retirement age is about 68 and you can retire in 2070.