Pension ABC

As a scientist receiving a Finnish grant or scholarship for scientific or artistic work, you are insured with the mandatory earnings-related pension scheme (MYEL) provided by Mela if you meet the following conditions:

• you are eligible for Finnish social security (see below)
• your grant or scholarship was awarded from Finland during or after 2009
• the grant/scholarship has been granted for a minimum of 4 months, with earnings of at least 1,276 EUR for these 4 months, which is equivalent to annual earnings of EUR 3,828
• you do not have an employment contract with the party awarding the grant or scholarship.
• The insurance obligation does not apply to studies for a vocational qualification, polytechnic degree or upper or lower level university degree.

a) When am I eligible for Finnish Social Security on the basis of residency?

Persons from EU/EEA Member States or Switzerland are covered by Finnish social security if they work in Finland for at least 4 months. Persons from other countries are required to reside and work in Finland permanently before they are covered by Finnish social security. If they have received the grant also for the second year, they are automatically covered from the beginning of the second year. For more information, please visit In To Finland.

b) How can I apply for insurance with Mela?

You can apply for the insurance once you’ve been informed that you are a grant or scholarship recipient, and you are about to begin or have begun the work for which the grant or scholarship was provided. You must submit your application form within three months of the date when you started working. You can apply online in Finnish or Swedish. In English you can apply by using the insurance application form on the Mela website  (https://www.mela.fi/en/grant-and-scholarship-recipients/applying-for-insurance/)

If you are coming from a country other than the EU/EEA Member States or Switzerland, you can only be insured with Mela if you are covered by Finland’s social security legislation on the basis of residential status. Therefore, please submit a social security application to Kela at the same time as you apply for pension insurance with Mela.

c) Do I have to be insured with Mela even if I have an employment contract or if I am self-employed?

The insurance is mandatory even if you are otherwise employed (e.g. with a different institution) or if you are self-employed. Pensions can be accumulated from several pension schemes managed by different pension providers simultaneously. Therefore, pension insurance policies taken out in accordance with the Employees Pension Act (TyEL) or Self-Employed Persons’ Pensions Act (YEL) do not have any bearing on the insurance obligation with Mela.

As a grant recipient, you pay your contributions yourself. The party that awarded the grant/scholarship does not participate in financing the contributions. The contribution percentage you have to pay to Mela depends on your age and the amount of your earnings. It is neither necessary nor possible to pay additional contributions to get the pension.

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 to you regardless of the length of time you spent working there.

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

Normally you should do nothing, see answers to question 4. You should apply for pension in good time, at least 6 months before.

If your work (based on a grant or scholarship) continues after you have left Finland, please contact Mela in this case. The insurance will be terminated if you are no longer covered by the Finnish social security.

Link: Contact information

The Mela earnings-related pension scheme for grant and scholarship recipients provides for:

• old-age pension
• disability pension

The pension insurance of Mela also includes group life insurance for surviving spouse and under-aged children in case of death, MATA occupational accident insurance and a short-term sickness policy. In addition, you can complement your insurance with voluntary leisure-time accident insurance.

The statutory pension security in Finland is composed of defined benefit earnings-related pension that accrues from work, as well as residence-based national pension and guarantee pension that ensure minimum security.

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 years and will increase to 70 years by 2027.

See question no. 11 below on the accrual of your pension.

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

It is not possible to pay voluntary contributions to qualify for a pension.

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. 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 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.

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.

There is no need to check your entitlements as they will be registered automatically, but if you have any questions you may contact the Finnish Centre for Pensions.

If you are a Finnish resident, you should check your pension record once you want to apply for a pension.

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

• www.etk.fi
• www.tyoelake.fi/
• www.mela.fi/en

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.

If you live in Finland you should apply approximately 2 months before you intend to retire. You can turn to your pension provider and ask for a form, or fill it in online. The form and instructions are available on the website tyoelake.fi/pension application.

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 for pension 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 (Kela) which will forward the application to your Finnish pension provider.

If you are resident in the USA, Canada, Quebec, Israel, Chile, Australia (countries that have Social Security Agreements with Finland), you should apply at the 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 another country, you have to send your Finnish application form and Appendix U either to a Finnish pension provider, the Social Insurance Institution of Finland (Kela) or the Finnish Centre for Pensions (Eläketurvakeskus). These institutions will transfer it to your pension provider. You can obtain the application form from the Finnish Centre for Pensions either online via tyoelake.fi or by post at: 00065 ELÄKETURVAKESKUS, FINLAND.

Yes you can. It does not affect your pension from Finland.

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.