Pension ABC

The statutory pension security in Finland is composed of an earnings-related pension that accrues from work, as well as residence-based national pension and guarantee pension that ensure minimum security. This factsheet informs you about the main part, the earnings-related pension scheme.

As an employed scientist working for a Finnish employer in research, you are entitled to an earnings-related pension. You will be insured once you have been working in Finland with earnings of at least EUR 58.27 in 2018.

You are covered by the private-sector earnings-related pension scheme (TyEL) if you are born 1 January 1980 or later and are employed by a Finnish university. Your pensionable earnings will be registered with Varma Mutual Pension Insurance Company.

In case that you have worked for a university prior to 2009 or were born before 1980, you remain insured with the public-sector earnings-related pension scheme of KEVA.

Link: Keva

The following information only concerns the pension provided by Varma Mutual Pension Insurance Company.

Both, you and your employer pay contributions to the earnings-related pension scheme. The average total contribution in 2018 is 24.4%. As an employee, you pay 6.35% of your salary if you are under the age of 53 or you have turned 63 years but not yet 68. You pay 7.85% if you are older have turned 53 but not yet 63 years. There is no ceiling either for the salary or the contribution. I addition to pension contribution you pay also unemployment contribution by 1.9% of your gross salary in 2018. Your contributions are being deducted by employer in salary payment.

No, you cannot receive a refund. However, you are entitled to a pension from Finland when you retire. Your earnings-related pension from Finland will be paid regardless of the length of time you have spent working there, your nationality or country of residence.

Since there is no qualifying period for the Finnish earnings-related pension, your insurance times in other countries are not relevant to the earnings-related pension in Finland. However, the times spent working in Finland may be important to the accrual of pension entitlements in an EU/EEA country. Times of pension insurance in Finland are taken into account in other EU/EEA countries.

You should enquire whether all information concerning your pensionable earnings and your employment in Finland have been registered correctly by your Finnish pension provider. In order to do so, you can request a pension record from your last pension provider, e.g. Varma, or from the Finnish Centre for Pensions. The record is also available on Varma’s website www.varma.fi or on this website.

You can enquire about your entitlements at any time. For this purpose you may contact your Finnish pension provider Varma or the Finnish Centre for Pensions personally, or visit www.varma.fi or this website.

In case you have consecutively been insured with more than one pension provider in Finland, it is always the last pension provider that will pay your pension.

The Finnish earnings-related pension scheme provides:

• old-age pension
• partial old-age pension (25 or 50 %)
• disability pension
• survivors’ pension
• rehabilitation

The earnings-related pension has no qualifying period. You can retire on old-age pension at your discretion after you have reached your minimum retirement age which in 2018 is 63 years and 3 months. The minimum retirement age will gradually increase to 65 years by 2027. If you retire after reaching your minimum age limit for old-age pension, you will get a 0.4% rise for every month of deferred retirement in addition to pension accrual. The maximum retirement age is 68 yrs and will increase to 70 yrs by 2027.

Since there is no qualifying period for the Finnish earnings-related pension, your insurance times in other countries are not relevant to the earnings-related pension in Finland. However, the times spent working in Finland may be important to the accrual of pension entitlements in an EU/EEA country.

There is no option to pay additional contributions, nor is it necessary.

Your pension accrual in Finland depends mainly on

• the level of your working income,
• the period of your insurance and
• the age at retirement.

For more details on the calculation of your pension refer to question B6.

You can find a pension estimate on your pension record (see question "What should I do before leaving Finland with regard to my statutory pension?" above). Should this not be the case, you can either contact your Finnish pension provider Varma or the Finnish Centre for Pensions personally and enquire about your entitlements at any time.

The pension you have accrued during your stay in Finland is determined separately for each year. It is calculated from the adjusted earnings for each year at an age-determined accrual rate.

The accrual rates are as follows:

• 1.5% between the ages of 18 and 52,
• 1.7% between the ages of 53 and 62 and
• 1.5% between the ages of 63 and 68.

Your accrued pension amount is multiplied by a life expectancy coefficient which adjusts your old-age pension amount to the changes in life expectancy. The coefficient is defined separately for each age group from the age of 62.

Formula:
Accrued pension for one year = earnings x accrual rate x life expectancy coefficient

More information on the earnings-related pension can be found on:

• www.varma.fi
• www.tyoelake.fi
• www.etk.fi

You must resign from your employment in Finland to be eligible for old-age pension. Onset date of the pension is always the 1st day of each month. Your employment will be automatically terminated only when you reach the maximum retirement age, which at the present is 68 yrs.

See question B5 on the accrual of your pension. It is also possible to defer the retirement beyond the age of 68 and to increase the entitlements by 0.4 percent for each month.

When receiving an old-age pension before the age of 68, you may begin a new employment or start a business. There is no salary limit for the earnings while receiving old-age pension. If you work in Finland, you will then accrue new pension entitlements until the age of 68 at a rate of 1.5 percent per year on earnings received while drawing a pension. Your new pension is payable from the age of 68 onwards. You have to apply for this pension separately.

If you work in Finland, a partial old-age pension from the age of 61 is also possible.

You should check your pension record once you want to apply for a pension.

If you live in Finland you should apply approx. a month before you intend to retire. The fastest way of submitting your application is to fill in the electronic old-age pension application form available at the eServices (Finnish or Swedish) on the Varma website. Alternatively, you can fill in the old-age pension application form on paper, for which separate instructions are provided. The forms and instructions are available on www.tyoelake.fi/en/pages/Lomakkeet.aspx. Please fill in the form preferably on your computer screen, print it out, sign it and send it to VARMA Mutual Pension Insurance Company. , P.O. Box 3, FI-00098 VARMA.

If you live abroad, you should apply 6 months before retiring. The application process depends on the country you live in:

As a resident of an EU/EEA country or Switzerland you should apply at the national pension authority in your country of residence, unless you never worked there. In the latter case you should apply in the EU/EEA country where you last worked. Please indicate that you apply for a pension in Finland. The application will be transmitted to the Office of International Affairs of the Social Insurance Institution of Finland, which will forward the application to your Finnish pension provider.

If you are resident in the USA, Canada, Quebec, Israel, Chile, Australia or India (countries with Social Security Agreements with Finland), you should apply at your national pension institution in your country of residence. They will submit your application to the Social Insurance Institution of Finland or the Finnish Centre for Pensions, which in turn will forward it to your pension provider in Finland. Please note that as a resident of the US, your application process is a little different: After you have contacted the US pension authority and stated that you want to apply for a pension in Finland, the US authority will contact the Finnish Centre for Pensions which will send you the application form.

If you live in PR of China, Republic of Korea or any another country, you must send your Finnish application form and Appendix U either to a Finnish pension provider, the Social Insurance Institution of Finland (Kela) the Finnish Centre for Pensions or to the institution of the last EU/EEA Member State or Switzerland whose legislation was applicable. These institutions will transfer it to your pension provider. You can obtain the application form from the Finnish Centre for Pensions either online via the link below or by post at: 00065 ELÄKETURVAKESKUS, FINLAND.

Link: Earnings-related Pension Insurance Companies and Pension Providers

You can apply for old-age pension, while still working in another country.

Working in another country does not affect the payment of your pension from Finland.

Where pension from Finland is concerned, you need only one application form to apply for all the pension you are entitled to under different pension acts. Even if you have worked for different employers, the insurance company that you were last insured with will issue your pension decision and pay your pension in its entirety

Finnish earnings-related pension is always paid out as a bank transfer.