Pension Contributions
In Finland, earnings-related pensions are financed mainly with insurance contributions paid by employers, employees and the self-employed.
Contribution rates for earnings-related pensions in 2020
| Insured persons/pension act | Contribution accrual % of cross wages | Employees/Self-employed persons’ contribution share %, under 53; 63 and above | Employees/Self-employed persons’ contribution share %, 53-62 years |
|---|---|---|---|
| Private sector wage earners / Employees Pensions Act (TyEL) | 24.4/21.8 | 7.15 | 8.65 |
| Seafarers/Seafarer’s Pensions Act (MEL) | 19.0 | 7.15 | 8.65 |
| Keva’s member organisations/Public Sector Pensions Act (JuEL) | 28.35 | 7.15 | 8.65 |
| State/Public Sector Pensions Act (JuEL) | 24.4 | 7.15 | 8.65 |
| Evangelical-Lutheran Church/Public Sector Pensions Act | 28.96 | 7.15 | 8.65 |
| The self-employed/The Self-employed Persons’ Pensions Act (YEL) | 23.1 | 24.1 | 25.6 |
| Farmers and grant recipients/Farmers’ Pensions Act (MYEL) | 13.9/13.4 | 24.1 | 25.6 |
Contribution rates for earnings-related pensions in 2019
| Insured persons/pension act | Contribution accrual % of cross wages | Employees/Self-employed persons’ contribution share %, under 53; 63 and above | Employees/Self-employed persons’ contribution share %, 53-62 years |
|---|---|---|---|
| Private sector wage earners / Employees Pensions Act (TyEL) | 24.4 | 6.75 | 8.25 |
| Seafarers/Seafarer’s Pensions Act (MEL) | 20.0 | 6.75 | 8.25 |
| Keva’s member organisations/Public Sector Pensions Act (JuEL) | 28.35 | 6.75 | 8.25 |
| State/Public Sector Pensions Act (JuEL) | 24.4 | 6.75 | 8.25 |
| Evangelical-Lutheran Church/Public Sector Pensions Act | 28.96 | 6.75 | 8.25 |
| The self-employed/The Self-employed Persons’ Pensions Act (YEL) | 23.1 | 24.1 | 25.6 |
| Farmers and grant recipients/Farmers’ Pensions Act (MYEL) | 13.9/13.4 | 24.1 | 25.6 |
For more detailed information on the various earnings-related pension insurance contributions, go to Contributions.
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- Private sector (TyEL and MEL)
- Public sector (municipal, State, the Church)
- Self-employed persons (YEL and MYEL)
Statutory earnings-related pension contributions charged from the employee’s wage are paid by employers and employees in both the private and public sectors. The earnings-related pension contribution withheld from the employee is the same under all pension acts and depends on the age of the employee. The self-employed and farmers pay an earnings-related pension contribution according to their insured earnings from work.
Pension assets collected through contributions paid in previous years and their investment return are used to finance the pensions in payment each year. In addition, the contribution paid by the Employment Fund also contributes to the pensions in payment. The State covers parts of the pensions that accrue under certain pension acts.
Paying contributions and defining the contribution rate
Employers report the earnings of their employees to the pension providers, disbursing both the employer and employee share of the contribution. The self-employed and farmers pay their pension contributions straight to their own pension provider.
The basis for pension contributions and the confirmed contribution rates vary by pension act. The contribution rates are prepared and confirmed according to praxis set out in each separate pension act. The exact amount of the collected pension contributions for each year is evident only later, once the employers report their realised contribution and wage sums.
Contribution rates for the self-employed and farmers are confirmed in advance and tied to the average contribution under the Employees Pensions Act. The pension insurance contributions for Keva’s member organisations and the State correspond to the average contribution under the Employees Pensions Act. Some of Keva’s member organisations pay both a contribution based on wage and a contribution based on pension expenditure. The latter covers the gap between the contribution level under the Employees Pensions Act and a sustainable contribution level of the pension system of Keva’s member organisations.
National pensions are financed with tax revenues.
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