Year-by-Year Changes - Finnish Centre for Pensions

Each year major or minor amendments are made to the statutory pension system and other social insurance that is closely linked to pensions. The changes are presented below in chronological order.

2020

Those born in 1956 and 1957 may reach their retirement age (63 years and 6 months and 63 years and 9 months respectively) this year.
No pension accrues for workers’ earnings that have deliberately not been insured.
As a result of the reform relating to the income from work in the Health Insurance Act, the pension that accrues for periods on a parental allowance is based on a higher earnings basis than before, while lower earnings than before give a right to pension accrual for periods on a sickness allowance and Kela’s rehabilitation allowance. The change applies to pension that accrues based on benefits granted in 2020 or later.
Full national pensions are increased by 34 euros and the guarantee pension by 50 euros per month as of the beginning of 2020.
An amendment to the Unemployment Security Act takes effect as of the beginning of 2020. The qualifying age for additional days of unemployment security rises for those born in 1961 and later from 61 to 62 years. For those born in 1965 and later, the age at which unemployment security ends changes from 65 years to the age group’s own retirement age.

2019

The retirement age of people born in 1956 is 63 years and 6 months.
The national pension index is frozen to the level of 2018, but the guarantee pension and the pension assistance (for the long-term unemployed) is raised by 9.25 euros per month.
The right to pension assistance for the long-term unemployed is expanded on 1 October 2019 to persons born before 1 September 1958.
The national Incomes Register is introduced. Employers or other payers must report the details of earned income paid to the Incomes Register after each payment. The register is utilised also in the earnings-related pension system. Among other things, it allows for a more up-to-date monitoring of earnings data.

2018

The first years-of-service pensions are paid out in 2018.
The retirement age for those born in 1955 is 63 years and 3 months.
The national pension index is frozen to the level of 2017, but the guarantee pension is raised by 15.01 euros per month.
The Act on Farmers’ Early Retirement Aid (LUTUL) expires at the end of the year. However, retirement aids based on this Act continue to be paid out until the recipient turns 63 or 65 years, depending on when the aid was granted.

2017

The earnings-related pension reform comes into effect. The reform includes, among others, the following amendments:

The retirement age (old-age pension) begins to rise progressively (by 3 months/year) as of the age group born in 1955. Persons born in 1962 are the first age group with a retirement age of 65 years. The retirement age of those born in 1965 or later is linked to life expectancy.
Pension starts to accrue at age 17 (instead of 18).
The pension accrual rate is standardized to 1.5 per cent of the gross annual earnings for all age groups. However, until 31 December 2025, the accrual rate is 1.7 per cent for persons aged 53–62 years. Their earnings-related pension contribution is 1.5 percentage points higher during this transition period. As of 2017, the employee’s earnings-related pension contributions are no longer deducted from the annual earnings.
The pension of persons who defer their old-age pension beyond their retirement age is increased by 0.4 per cent per month for late retirement.
The partial early old-age pension and the years-of-service pension are introduced. The partial old-age pension replaces the part-time pension, which is no longer granted. The partial old-age pension can be granted to persons born in 1949 or later who do not receive any other earnings-related pension and who have turned 61 years (for those born in 1964 or later, 62 years). The person taking out a partial old-age pension can choose to take out 25 or 50 per cent of the earnings-related pension accrued at the time of retirement. If the pension is taken out early, the part taken out is permanently reduced by 0.4 per cent per month from the time of taking out the pension to the time of reaching the retirement age. If it is taken out late, the part taken out is permanently increased by 0.4 per cent per month from the month in which the retirement age is reached to the month that the pension is taken out. There are no restrictions concerning how much the person can work while drawing a partial old-age pension.
A years-of-service pension can be granted to a worker who has turned 63 years and has done work that requires great mental or physical effort for at least 38 years. In addition, the worker’s ability to work must be reduced, although not as much as for a disability pension. The first years-of-service pensions can be paid out in 2018.
The earnings-related pension reform also affects the retirement age of the national pension, but only for those born in 1965 or later.
The Local Government Pensions Act (KuEL), the State Employees’ Pensions Act (VaEL) and the Evangelical-Lutheran Church Pensions Act (KiEL) merges into the Public Sector Pensions Act (JuEL) which comes into force at the beginning of 2017. Kela’s employees are also covered by JuEL.
The Competitiveness Pact increases the employee’s share and reduces the employer’s share of the earnings-related pension contribution.
The Pension Assistance comes into force on 1 June 2017. The benefit is of the same size as the guarantee pension. It can be granted to those born before 1 September 1956 who are long-term unemployed on 31 August 2016.
The national pension index is frozen and cut by 0.85 per cent of the 2016 level.

2016

The reform of the Seafarer’s Pensions Act (MEL) comes into force. The accrual and pension contribution rates are standardized with those in the other earnings-related pension acts. The determination of the State’s share of the pension expenditure under MEL changes. Following a transition period, the retirement age is standardized with that of the other pension acts.
The registered TEL supplementary pension insurance arranged by employers expires on 31 December 2016.

2015

As of the beginning of 2015, a change in legislation means that the pension provider is under obligation to establish a disability pension applicant’s right to rehabilitation.
Index adjustments to national and earnings-related pensions is limited to 0.4 per cent.
LITA compensations are reduced in full also in all those pensions which have been determined based on the pre-2005 pension regulations and which are later amended. However, the pensions may not be lower than they would have been after the integration in line with the pre-2005 regulations.
The accrual rate (1.5%) for the time that disability pension accrues (amended in 2010) is applied also in retrospect to valid private-sector time in retirement for which new pension accrues for the period 2006-2009
Pension insurance for grant recipients becomes more flexible.
An act on additional pension for Olympic medalists comes into force.
The government bill for the 2017 pension reform is passed.
The validity of the Act on Farmers’ Early Retirement Aid (LUTUL) is extended with a legislative amendment (1064/2014) for the years from 2015 to 2018.

2014

The act that promotes people on a disability pension to return to work is extended until the end of 2016.
The validity of the registered TEL supplementary pension arranged by employers ends on 31 December 2016. The act that regulates the validity period came into force on 1 January 2014.

2013

The possibility to retire on an early old-age pension comes to an end for the 62-year-olds who were born in 1952 or later both within the national and the earnings-related pension systems. However, the 63-64-year-olds may be granted a national early old-age pension.
The earliest eligibility age for part-time pension rises to 61 years for those born in 1954 or later.
The right to receive an old-age pension granted based on the right of additional days of unemployment insurance at age 62 is abolished for persons born in 1958 or later. In the national pension system, the right remains for those born between 1958 and 1961 at the age of 64.
As of 2013, the earnings-related pension is no longer reduced by such LITA benefits that were granted based on an accident that occurred before 2004. In addition, a pension that has accrued for work that the pension recipient has done as of the year following the LITA accident will not be reduced by LITA benefits.
The risk-bearing capacity of pension providers is improved so that the solvency margin and the equalisation amount are combined and form the solvency capital.
The reduced pension contribution for the newly self-employed rises.

2012

In the future, the integration of the survivors’ pension granted after the deceased who had retired under the rules valid before 2005 means, as with other new pensions, that the LITA benefits are deducted directly from the pension.
A long-term unemployed person born in the 1950s who has turned 62 years can, under certain conditions, be granted an old-age pension without a reduction for early retirement.
Data on public sector pensions is included on the pension record.

2011

The guarantee pension comes into force on 1 March 2011.
The definition of an entrepreneur in the pension act for self-employed persons changes so that a person in a leadership position of a limited company is a person who owns alone more than 30 per cent or, together with family members, more than 50 per cent of the company shares or the company voting rights.
The definition of a self-employed farmer under MYEL changes so that a farming entrepreneur is a person who does farming, fishing or reindeer herding and is in a leadership position of a limited company and owns alone more than 30 per cent or, together with a spouse, common-law spouse or family member in a direct ascending or descending line, more than 50 per cent of the company shares or the company voting rights, or who together own more than 50 per cent of the voting rights based on the shares.
The validity of the Act on Farmers’ Early Retirement Aid (LUTUL) is extended with a legislative amendment (1787/2009) for the years from 2011 to 2014.

2010

Returning to work from a disability pension is made easier with a temporary act that is in force from 1 January 2010 to 31 December 2013. A disability pension recipient has the right to earn at least 600 euros per month alongside the pension. The pension may also be suspended for the period of time spent working. This has been possible already in the national pension scheme.
For the first time, a lump-sum increase to the pension is paid out to those who have become disabled before the age of 51. The increase is paid out to those whose pension has started five years ago or more. The younger the retiree at the onset of disability, the bigger the increase. The increase is made only once to each pension.
The life expectancy coefficient affects the pensions for the first time. The coefficient decreases the monthly amount of new statutory earnings-related pensions.

Social contract reforms come into force:

The level of starting disability pensions is increased via adjustments to the projected pension component and accrual rates. The accrual rate for the projected pension component rises from 1.3 to 1.5 per cent between the ages of 50 and 63.
The life expectancy coefficient is introduced in earnings-related disability pensions.
The widow’s/widower’s own pension, if over a certain limit, reduces the survivors’ pension paid to the spouse. This limit is changed.
The lower age limit of the part-time pension rises to 60 years. At the same time, pension accrual during time spent in part-time retirement changes. Pension is accrued only from earnings from work, no longer from the part-time pension share. Changes only apply to those born in 1953 or later.
The accrual for periods of job alternation leave allowance is lowered.
The age limit for the part-time pension is raised to 60 years and the pension accrual for the earnings reduction is abolished. The changes apply to persons born after 1952.
The age limit for the additional days of the unemployment allowance is raised by one year for those born in 1955 or later.

2009

Grant recipients start to earn earnings-related pensions. The pensions are regulated in the Farmers’ Pensions Act and the grant recipients are insured by the Farmers’ Social Insurance Institution MELA.

2008

Pension records are now sent to all insured once a year by private-sector pension providers.
A temporary act (valid from 2008 to 2012) to strengthen the solvency of pension providers comes into force.

Structural reform of national pensions:

The municipal cost-of-living categories are abolished (municipalities in category 2 raised to category 1). The cost-of-living categories of municipalities thus no longer affect the pension amounts. The pension is determined based on what was previously the higher municipal cost-of-living category.
The national pension concept changes. The care and housing allowances of a pension recipient are no longer considered pensions.
The lower limit for the smallest payable pension is reduced.
The amount of a full pension increases.
Institutional care no longer reduces the pension amount.

2007

The Employees Pensions Act (TyEL) takes effect. It replaces the Employees’ Pensions Act (TEL), the Temporary Employees’ Pensions Act (LEL) and the Pensions Act for Performing Artists and Certain Groups of Employees (TaEL).
The State Employees’ Pensions Act (VEL) is rewritten and renamed (in Finnish) to VaEL.
The pension acts for the self-employed and the Seafarer’s Pensions Act (MEL) are rewritten.
An investment reform is realized.
The farmers’ early retirement scheme is extended with a new act, (The Farmers’ Early Retirement Aid Act 612/2006, LUTUL 2007) for the period 2007 – 2010.

2006

The second phase of the 2005 pension reform comes into force.

In addition to the old-age pensions, other pensions are now determined in a new way.
The projected pension component is now determined so that as of age 50, the accrual rate is 1.3 per cent until the age of 63 when the period of the projection pension component ends and, after the transition period, the projected pension component is determined based on the earnings of the last five years.

2005

The pension reform comes into force. The old-age pension is determined under the new rules, but the disability pension is determined under the old rules if the pension starts in 2005.

The worker must be insured between the ages of 18 and 68. As of this year, the pension is calculated based on the earnings of each year between those ages. Pension accrues for all work done between the ages of 18 and 67, also for work done while drawing a pension.
Pension accrues also for certain periods of social security benefits (unsalaried benefits).
The pension rights for employments that continue after the turn of the year (2004/2005) are determined under former laws until the end of 2004. The new accrual rates come into force at the beginning of 2005.
The earnings-related pension index (previously index for persons of retirement age) is applied to all pensions in payment. Earned pension rights and pensionable wages are adjusted with a new wage coefficient, in which 80 per cent of real adjustments to wages are taken into consideration. The halfway index (previously index for persons of working age) is used to determine pensions in such cases in which the pension is determined under the rules valid before 2005.
The retirement age is flexible, from 63 to 68 years.
The old-age pension can be drawn as of age 63, without any reductions made to the pension.
Integration between the earnings-related pensions is discontinued completely in the private sector.
The accrual rate is 4.5 on earnings earned after turning 63 years and 1.9 per cent for earnings accrued at age 53–62.
If the pension is taken out late (after age 68), it is increased by 0.4 per cent for each month that it is deferred.
If the pension is taken out early (as of age 62), it is reduced by 0.6 per cent for each month that it is taken early.
The right to unemployment pension is abolished for persons born after 1949. The unemployment pension is replaced by additional days of the unemployment allowance.
The individual early retirement pension is abolished for those born after 1943, the conditions for an individual early retirement pension is included in the regulations for the disability pension.
As of 2009, the life expectancy coefficient will be applied.
The national pension legislation is also reformed, but the retirement age in that scheme remains at 65 and the reduction for early retirement and the increase for late retirement remain unchanged. The age limit for early retirement in the national pension scheme rises to 62 years.
The employer’s pension contribution is increased from 4.6 per cent to 5.8 per cent for persons who have turned 53 years.
On the 1^st of May, the Act on Pension Assistance for Long-Term Unemployed Persons takes effect. According to the Act, a person who meets the criteria for the pension assistance is awarded an old-age pension without any reduction for early retirement at age 62, from both the earnings-related and the national pension scheme.

2004

The principle of the last pension provider extends to the public sector.
The right to rehabilitation becomes a subjective right (with certain conditions).

2003

Parliament passes the pension reform package; one of the aims is to postpone retirement.
The retirement age for the part-time pension is restored to 58 years for those born in 1947 and later. Simultaneously the pension accrual for old-age pension rights during the part-time pension is weakened somewhat.
The individual early pension is no longer granted to persons born after 1943. However, in the public sector, individual early pensions may still be granted to persons born between 1944 and 1947.
As the flat-rate base amount of the national pension for all pensioners was abolished in 1996, it is compensated to those pensioners receiving earnings-related pension, whose pension had started between 1975 and 1995. During that time, the base amount reduced the earnings-related pension if the pension exceeded 60 percent of the previous wage.
The validity of the Act on Farmers’ Early Retirement Aid (LUTUL 1995) is extended with a legislative amendment (593/2002) to cover the period from 2003 to 2006.

2002

The earnings-related pension system adopts the euro.
As of 1 April, the age before which a disability pension under the National Pensions Act is not granted until the claimant’s rehabilitation prospects are examined is raised to 20 years.

2001

The spouse supplements and the transition period for the gradual abolition of the base amount of national pensions ends on 1 January 2001.

2000

The age limit for the individual early retirement pension increases from 58 to 60 years for persons born after 1943. In the public sector, the age limit may also be 58 years for persons born in 1944–1946 and 59 years for persons born in 1947.
In the earnings-related pension scheme, the required right to a projected pension component linked to the unemployment pension in 1994 is abolished. The projected pension component is no longer added to the unemployment pension but is paid when the unemployment pension becomes an old-age pension or a survivors’ pension.
The reduction for early retirement in the early old-age pension decreases from 0.5 to 0.4 per cent for each month that the pension is taken early.
The increment for deferred retirement in the old-age pension decreases from 1.0 to 0.6 per cent for each month that the pension is deferred.
The validity of the Act on Farmers’ Early Retirement Aid (LUTUL 1995) is extended with a legislative amendment (1326/1999) for the years from 2000 to 2002. Reindeer herders are also covered by the Act.

1999

As of 1 August, disability pensions under the National Pensions Act are not granted to persons aged under 18 until the person’s prospects for rehabilitation have been clarified.
As of 1 August, and under certain conditions, a disability pension under the National Pensions Act may be left dormant for 6–24 months.

1998

All employment contracts lasting for less than one month or in which the minimum earnings limit under TEL is not reached, as well as all work where a private household is the employer, are insured under TaEL.
As of 1 July, the eligibility age for the part-time pension is lowered to 56 years. The change will be in force until the end of 2002.

1997

Receiving the pensioners’ housing allowance, the pensioners’ care allowance, the child increase or the front-veterans’ supplement is no longer dependent on receiving other national pension.

1996

The national pension becomes fully deductible from the earnings-related pension. Pensions which begun before 1 January 1996 and which did not include an addition were gradually phased out over five years.
National pension contributions are no longer levied from the insured and the pension recipients.
The temporary disability pension becomes a cash rehabilitation benefit.
Two TEL indices are implemented in the earnings-related pension scheme: the index for persons of working age and the index for persons of pensionable age. The index for persons of working age considers half of the development of real earnings. The equivalent rate in the index for persons of pensionable age is 20 per cent. It is used to adjust the pensions of those who have turned 65 years.
In the earnings-related pension scheme, the entitlement criteria for the projected pension component is tightened and the accrual rate for the projected pension component is lowered for persons aged 50 or more to 1.2 per cent of the gross wage for people between the ages of 50 and 59 and 0.8 per cent for those between the ages of 60 and 64.
The calculation of the wage that forms the basis for the pension is gradually changed to being based on an individual’s earnings for the last 10 years.
The employee’s earnings-related pension contribution is reduced from the pensionable wage for the first time when calculating a pension (the act came into force in 1994).

1995

In the private sector, the Act on Farmers’ Early Retirement Aid (1293/1994; LUTUL 1995) comes into force.
The change-of-generation pension system of farmers (SPVEL) ends at year-end. The already granted pensions in this scheme may continue to be paid until the pension recipient turns 65 years.
The farm closure pension system (LUKL) ends at year-end. The already granted pensions in this scheme may continue to be paid until the pension recipient turns 65 years.

1994

The lower age limit for the individual early retirement pension is increased from 55 to 58 years for persons born after 1939.
The recipient of an individual early retirement pension may return to work without losing the right to the pension. Depending on the amount of earnings, the pension may be paid either to half the amount or be left dormant completely.
The age limit for the part-time pension in the private sector is lowered to the same as in the public sector, that is, from 60 years to 58 years.
The entitlement criteria for the unemployment pension are tightened and the rules on the unemployment pension in the national pension scheme are harmonised with those of the earnings-related pension scheme.
In the earnings-related pension scheme, the annual accrual rate is increased to 2.5 per cent for persons aged 60–64.
The national pension scheme requires a minimum time of residence of five years in Finland before a pension can be awarded.
The national pension and the survivors’ pension paid by the Social Insurance Institution are made proportional to the time of residence in Finland.
The EEA legislation takes effect in Finland.
The index adjustments of earnings-related and national pensions are waived for this year.
The increment to an earnings-related pension extends. It now applies not only to periods of the unemployment allowance but also to periods of adult education and rehabilitation benefits.

1993

In the earnings-related pension scheme, the Act on Employee’s Pension Contribution comes into force. The change in the contribution now reduces the TEL index.
In the private sector, the Act on Farm-Closure Compensation for Farmers (1330/1992; LUKL) comes into force.
In the public sector, the earnings-related pension accrual time, targeted level and retirement age are harmonised with those in the private sector. In new public-sector employment relationships, the general retirement age is 65 years.

1992

Pension recipients start to pay a national pension contribution.
The Farm Closure Act (LUEL) ends at year-end. However, as a rule, the granted pensions are paid for the rest of the farmer’s life.

1991

Pensions awarded by the Seafarer’s Pension Fund (MEL pensions) are linked to the common system for division of liabilities with the rest of the earnings-related pension scheme of the private sector.
A rehabilitation reform in the earnings-related pension system takes effect. The distribution of work of the rehabilitation providers is clarified, and the possibilities for rehabilitation must be examined before granting a disability pension. In addition, the rehabilitation allowance is introduced to the earnings-related pension system.
The Act on Change-of-Generation Pensions (1317/1990; SPVEL) comes into force on 1 January 1991

1990

The survivors’ pension reform takes effect on 1 July:

The survivors’ pension is granted according to new rules when the death of the insured occurs on 1 July 1990 or later.
Widowers and, in the earnings-related pension scheme, also former spouses become entitled to a surviving spouse’s pension under certain conditions.
In the earnings-related pension scheme, pensions for the surviving spouse and for the children are separated.
The surviving spouse’s pension is dimensioned to correspond to the economic loss caused by the death so that the surviving spouse’s own income is considered when calculating the pension. In other words, an integration of the surviving spouse’s pension is carried out.
In the national pension scheme, the pension entitlement of a surviving spouse who cares for a child is broadened and, on the other hand, the pension entitlement of childless surviving spouses is made stricter.
The age limit of orphan’s pensions is increased to 18 years.
The surviving spouse’s pension and the orphan’s pension become taxable income.

1989

The childcare allowance becomes a benefit for disabled persons. Thus, it is no longer regarded a pension.
On 1 July, the early old-age pension, the individual early retirement pension and the part-time pension are added to the public sector earnings-related pension benefits.
Workers are to be insured as of the beginning of the year in which they turn 14 years.

1987

The part-time pension is added to the pension benefits of the private sector earnings-related pension system.

1986

In the national pension scheme and the earnings-related pension scheme of the private sector, the early old-age pension and the individual early retirement pension are added to the pension benefits.
In the earnings-related pension scheme of the private sector, the Freelance Employees’ Pensions Act (TaEL) takes effect. (In 1998, the name of the act changes to The Pension Act for Performing Artists and Certain Other Employee Groups.)
The age limit for the unemployment pension is changed back to 60 years so that new age groups under the age of 60 are no longer entitled to an unemployment pension.
An additional front-veteran’s supplement is paid as of 1 November.

1985

Phase III of the national pension reform: the basic supplement of the national pension is now affected only by the person’s own earnings-related pensions and equivalent compensations.

1984

Phase II B of the national pension reform: changes to the determination of the pensions.

1983

Phase II A of the national pension reform: earnings from work no longer affect the supplement of the national pension. The basic amount and the supplement of the national pension become taxable income.
On 1 July in the earnings-related pension scheme, women get the right to a front-veterans’ early retirement pension

1982

Sickness allowance becomes primary in relation to the disability pension from the earnings-related pension scheme.
In the earnings-related pension scheme, an Act on Early Pensions for Front-Veterans takes effect on 1 July. Based on the Act, an early pension for front-veterans can be granted to a male person living in Finland who has a front-veterans’ service badge.
On 1 September in the national pension scheme, also women get a right to front-veteran’s pensions. Front-veteran’s pensions are paid to women on the same grounds as to men.

1981

Phase I B of the national pension reform: changes to the determination of the pensions.

1980

The age limit for the unemployment pension is lowered to 55 years.
The first phase, phase I A, of the national pension reform: changes to the structure and determination of the pensions. Old-age allowances are no longer granted.

1979

The pensionable wage is calculated by considering the wages of the two middle years (in terms of earnings level) of the last four years (previously the two best years).

1978

Elected local government officials become covered by pension acts.
The qualifying age for the unemployment pension reduces to 58 years.

1977

The grounds for the index increase of earnings-related pensions is changed. The index is based on the average of changes in wage and price levels (previously it was based only on changes in wages).

1975

Discretionary increase, the accrual rate rises from 1 to 1.5 per cent per year.

1974

The Farm Closure Pension Act (16/1974; LUEL) comes into force. The pension can be granted to a farmer who permanently stops farming.

1973

A new benefit is introduced: the partial disability pension.

1971

A new benefit is introduced: the unemployment pension. The qualifying age is 60 years. (In the 1980s, it was reduced to 55 years and raised again to the original 60 years as of the beginning of 1991).

1970

The Self-Employed Persons’ Pensions Act (YEL) and Farmers’ Pensions Act (MYEL) come into force.

1969

The general Survivors’ Pensions Act (PEL) comes into force.
The State’s Survivors’ Pensions Act comes into force.

1967

The State Employees’ Pensions Act (VEL) and the Evangelical-Lutheran Church Pensions Act (KiEL) come into force.
A new pension benefit is introduced in the earnings-related pension system: the survivors’ pension.

1966

The pensionable wage is calculated by considering the wages of the two best years (in terms of earnings level) of the last four years (previously the regular income in the final year of employment and the year before).

1964

The Local Government Employees’ Pensions Act (KVTEL) is introduced.

1962

The Employees’ Pensions Act (TEL) and the Temporary Employees’ Pensions Act (LEL) come into force on the 1st of July.

1957

New National Pensions Act (KEL) comes into force.

1956

The Seafarer’s Pension Act (MEL) comes into force.