Wage-earners
The majority of all persons with an earnings-related pension insurance, approximately 60 per cent, are insured under the Employees Pensions Act (TyEL). All private-sector wage earners, except for sailors, are insured under this act.
TyEL, which came into force in 2007, replaced all previous private sector pension acts: the Employees’ Pensions Act (TEL), the Temporary Employees’ Pensions Act (LEL), and the Pension Act for Performing Artists and Certain Other Employee Groups (TaEL).
Private sector employers have to take out insurance under TyEL for all their employees who are 17–67 years of age if the employees’ earnings exceed the insurance obligation limit. In 2024, this limit is 68,57 euros/month. Since the limit is so low, pension accrues for virtually all gainful employment. The age at which the insurance obligation ends grows gradually:
| Year of birth | Age at which insurance obligation ends |
| 1957 or earlier | 68 |
| 1958-1961 | 69 |
| 1962- | 70 |
Foreign employees posted to Finland for a short time do not have to be insured under the earnings-related pension acts. More detailed information on insurance is available on the website Työeläke.fi.
Employers take out pension insurance for their employees from one of the earnings-related pension providers:
- a pension insurance company,
- a pension fund, or
- an industry-wide pension fund.
When an earnings-related pension insurance is taken out from a pension insurance company, it is administered either by way of an insurance contract (employer with a contract) or by disbursing a contribution to the pension insurance company (occasional employer).
The employer and the wage earner both pay a pension contribution based on the gross wage of the wage earner. The employer’s share of the contribution is larger than that of the wage earner. As a rule, if the earnings-related pension contribution is raised, the increase is split in half between the employer and the wage earner. The employer withholds the wage earner’s share of the contribution straight from their wages and pays the entire insurance contribution to the pension provider.
The earnings-related pension providers and the Finnish Centre for Pensions supervise that employers pay the earnings-related contributions and report information on their employees to the pension providers. If employers fail to pay the pension contributions, the employees are protected from losing their right to a pension as long as they can offer proof of having worked for the employer in question.
Seafarer’s Pensions Act Reformed in 2016
The Seafarer’s Pension Act (MEL) covers all persons who carry out work defined in the Act on a Finnish merchant vessel used in foreign traffic. For ice-breaker vessels, the Seafarer’s Pensions Act applies to the crew and to ship’s officers who have an employment contract with the employer.
Sailors’ pensions are managed by the Seafarer’s Pension Fund.
The Seafarer’s Pensions Act was the first earnings-related pension act to come into force in 1956. Its benefits and their funding differ slightly from those in the other earnings-related pension acts. The number insured sailors has decreased steadily over the last few years.
The pension contribution of sailors used to be split evenly between the employer and the wage earner. As of the beginning of 2016, the wage earner’s share is the same size as that of other wage earners. The employer pays the rest. As a result of the reform the disability pensions granted by the employer to its employees may affect the size of the employer’s pension insurance contribution.
Public sector employees
The Public Sector Pensions Act (JuEL) came into force as of the beginning of 2017. It combines the Local Government Pensions Act (KuEL), the State Employees’ Pensions Act (VaEL), the Evangelical-Lutheran Church Pensions Act (KiEL) and the act on pensions for the employees of Kela (KelaL). Employees of the Bank of Finland have also been covered by the Public Sector Pensions Act as of 1 January 2021.
Of all the insured, approximately 20 per cent are covered by the Public Sector Pensions Act and around five per cent by the State Employees’ Pensions Act. At the end of 2021, the pension security of 25,000 people was arranged through smaller public-sector pension acts. Roughly 70 per cent of the insured in the public sector are women.
The public sector pension provision covered persons in an employment or service relationship with Keva’s member corporations. They include municipalities and federations of municipalities and, under certain conditions, municipal limited companies and associations. Municipal family carers and personal carers, as well as municipal elected officials fall, are also covered by the Public Sector Pensions Act.
State employees and officials are covered by the State Employees’ Pensions Act. Comprehensive school and sixth-form college principles and teachers born before 1970 are also covered by this Act, as were teachers whose current employment or service began before 1 January 1999. University employees born before 1 January 1980 are covered by the Public Sector Pensions Act. Those born later are covered by the private sector Employees Pensions Act.
The Evangelical-Lutheran Church Pensions Act covers employees of the Evangelical-Lutheran Church, its parish or federation of parishes who are in the service or employment of the Church.
Employees of the Orthodox Church are insured under the Employees Pensions Act. Only the pensions of priests, deacons and cantors who came into service before 1 January 1994 are still paid under the pension regulations of the Orthodox Church. The pension rules are the same as those in the Public Sector Pensions Act. Employees of the central and diocese administration, whose employment relationships began before 1993, are still covered by the State Employees’ Pensions Act.
The employees of the regional government of Åland whose employments began after 1 January 2008 are insured under the Employees Pensions Act. The pensions of those whose employments began before 1 January 2008 are managed by the Regional Government of Åland and corresponds to public sector pensions.
The pensions of parliament members, members of the Council of State and the President of the Republic are determined in separate acts. The pension benefits of a Finnish representative elected to the European Parliament are determined, in applicable parts, under the pension act for parliament members.
Keva manages nearly all public sector pensions and the financing of municipal pensions. Keva grants and pays out all public sector pensions except for those of the Åland Islands and certin Orthodox Church pensions.
Public sector pensions differ from those under the Employees Pensions Act mainly in that pension accrual of public sector pensions were better in the past and the retirement age of certain occupational groups was lower. In addition, the definition of vocational disability used when evaluating the right to disability pension is different for public sector employees.
The pension contribution is the same for public and private sector wage earners. The contributions of public sector employers are determined differently than those of private sector employers.
Read more on Etk.fi: