When the retirement age increases per each age cohort, the years-of-service pension provides an opportunity to retire at the age of 63 for persons who have worked for at least 38 years in arduous jobs and whose ability to work has deteriorated.

A study by the Finnish Centre for Pensions examined whether the years-of-service pension serves as a special pension for those who have worked in arduous jobs or whether it is rather a disability pension or an early exit route from work.

According to the study, years-of-service pensioners differ clearly from those on other early retirement routes, such as disability pension recipients or those who have taken a partial old-age pension.

“Years-of-service pensioners have worked in positions where they have been exposed to heavy physical stress, which may cause growing health problems and difficulties in performing at work near the retirement age. Those on disability pensions, on the other hand, often have health problems several years before retirement, which is less common for the years-of-service pensioners”, says Senior Researcher Aart-Jan Riekhoff from the Finnish Centre for Pensions.

Years-of-service pensioners are often men and low-educated

More than 90% of the years-of-service pensioners are men. The proportion of men is much higher than in other early retirement routes.

Years-of-service pensioners are relatively low-educated; less than 4% of them had a lower or higher university degree. Those receiving a years-of-service pension also had longer working lives than other groups.

Years-of-service pension applications usually rejected because the job was not arduous enough

Musculoskeletal diseases formed the most common underlying cause for being granted a years-of-service pension. Nearly three in four of those who have retired on a years-of-service pension have been diagnosed with a musculoskeletal disease. Very few of those who were granted a years-of-service pension had a mental disorder or a cardiovascular disease.

Applications for the years-of-service pension were most often rejected because the work done could not be considered sufficiently arduous or the arduous nature of the work could not be proven. For men, this was the reason for a rejection in 73% of cases, and for women in 79% of cases.

Years-of-service pension unlikely to become a more regular early exit route

In 2018–2023, a total of 459 persons retired on a years-of-service pension. The use of the years-of-service pension as an early exit route may increase in the future as the retirement age for the old-age pension continues to rise one age group at a time and the possible time spent on a years-of-service pension increases to a total of two years.

 “Nonetheless, there is no reason to believe that the years-of-service pension would become a much more widely used exit route, given the strict conditions of the years-of-service pension and the demanding application procedure”, explains Senior Researcher Anu Polvinen from the Finnish Centre for Pensions.

The application for a years-of-service pension must document in detail the content of one’s career. In addition, a statement from a physician and the employer’s description of the nature of the work is required.

According to Riekhoff, the demanding application procedure may result in only certain groups seeking a years-of-service pension, such as those working for large employers.

“Those who don’t know about the years-of-service pension or who don’t receive adequate support with the application procedure may not apply for this pension even if they were eligible and would benefit from earlier retirement through the years-of-service pension”, Riekhoff concludes.

Research publication Arduous careers in times of longer working lives

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