CALCULATING A SELF-EMPLOYED PERSON'S PENSION

A self-employed person’s YEL pension accumulates from the entry into force of the Self-Employed Persons' Pensions Act on January 1, 1970 and the attainment of 23 years of age until the age of 65.

YEL pension accrues at the annual rate of 1.5 per cent of the confirmed index-adjusted earned income. As of January 1, 1994 pension will accrue at 2.5% per cent for each year of self-employment as of the beginning of the year in which the self-employed person reaches the age of 60 until the age of 65.

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 pension.

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 covered by the 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.