Calculating employees’ TEL pensions

Pension accrual from earnings

Since the Employees' Pensions Act took effect on July 1, 1962, pension accrues at an annual rate of 1.5 per cent.

Older employees still at work accrue more pension as of January 1, 1994, i.e. 2.5 per cent of pay per year of employment from the start of the year following their attainment of the age of 60 until their retirement.

Pension accrual from projected pensionable service

In addition to the years of employment, projected pensionable service, i.e. the period the employee did not have time to work before retirement, generally accrues disability pension and individual early retirement.

The accrual rate for projected pensionable service is:

• 1.5% of annual pay until the age of 50
• 1.2% of annual pay for people aged 50–59
• 0.8% of annual pay for people aged 60–64.

The projected pensionable service is added to the pension, if all the following preconditions are met:

• The employee has lived in Finland or another EU country before the start of the pension for at least ten years.
• The employee has been gainfully employed in Finland and in the cover of employment pension acts over a period of 12 months during the year when his/her pension started and the preceding 10 years, and
• The employee becomes disabled while at work or within one year from the end of the employment. Daily allowances received from sickness and unemployment periods, study leaves, rehabilitation allowance periods and childcare periods for small children will lengthen the year.

The survivor’s pension payable after the death of an employee or self-employed person is calculated in accordance with the disability pension that the employee would have been entitled to on the date of his/her death.

Unemployment pensions only accrue from periods of employment. If the unemployment pension contains a right to projected pensionable service, the pension component accruing from that time will be added to the old-age and survivor’s pensions after the unemployment pension.