Life expectancy coefficient confirmed for 2020
The Ministry of Social Affairs and Health has confirmed the life expectancy coefficient for 2020 at 0.95404.
The confirmed life expectancy coefficient will reduce the earnings-related old-age pension of those born in 1958 whose pension begins in 2020 or later. The old-age pension will be reduced by 4.596 per cent. The life expectancy coefficient will also reduce the disability pensions granted in 2020. The projected pension component of disability pensions will not be reduced, however, since it is not affected by the life expectancy coefficient.
The life expectancy coefficient adjusts the level of starting earnings-related pensions and the pension expenditure in line with the changing average life expectancy. As long as the average life expectancy continues to rise, the life expectancy coefficient will reduce monthly pensions.
The aim of the life expectancy coefficient is to get people to work longer in order to make up for the cutting effects of the coefficient. The target retirement age (the age at which the effect of the life expectancy coefficient has been removed) for those born in 1958 is 65 years and 1 month.