Pension system in Finland

If you’re starting a business in Finland, you might be wondering why it’s mandatory for entrepreneurs to take out pension insurance. Or for employers to get pension insurance for their employees. We’ll help you understand the Finnish pension system and the insurances – dive in below.

What is the pension system like in Finland?

There are two main types of pensions – the national pension and the earnings-related pension. The latter is a pension that you accrue based on your work. This applies to both employees and entrepreneurs. The national pension and its supplement, the guarantee pension, are there to secure basic livelihood in case the earnings-related pension is very small or doesn’t exist. Pensions are a part of social security in Finland, and voluntary pension insurances are relatively uncommon.

One of the best pension systems in the world

The Finnish pension system might not be all that simple, but it is reliable. In fact, Finland has one of the best pension systems in the world. The Mercer Global Pension Index ranks Finland’s pension system number one in the world for transparency and reliability, and number seven in the overall score.

Don’t take our word for it: Check out the the Mercer Global Pension Index yourself (

What is Ilmarinen?

We are Finland’s largest and oldest private earnings-related pension insurance company.

We have taken care of our customers’ pensions since 1961, and as a mutual pension insurance company, we are wholly owned by our customers.

Our task is to ensure that our customers receive the pension they earned from work.

We offer employees’ and self-employed persons’ pension insurance for employers and entrepreneurs operating in Finland.

Pension for all employees and entrepreneurs

Earnings-related pension encompasses both employees and entrepreneurs. Self-employed people are insured under YEL, which they take out for themselves. Employees are insured under TyEL, an insurance which their employer takes out. These insurances are a part of the Finnish social security, and they are mandatory.

YEL – pension security for the self-employed

If you are an entrepreneur, then YEL insurance is the basis for both your pension and social security. With each insurance contribution, you grow your pension and improve your other social security benefits. The insurance is mandatory for entrepreneurs, and you cannot replace it with a voluntary pension insurance.

Do you need YEL insurance? Buying it in our online service only takes a few minutes. Grab your Finnish online banking credentials and let’s go!

I want to buy YEL insurance

Taking care of your employees’ pension cover

As an employer, you need to take out pension insurance for your employees. This insurance is known as TyEL. When you take out TyEL insurance with us, you benefit from our excellent services and client bonuses.

TyEL – pension security for your employees

If you employ at least one person on a permanent basis and pay them a certain minimum amount in wages, you will need to take out TyEL insurance. Even if you are only a temporary employer, you have to pay the insurance contributions.

Do you need TyEL insurance? We’ve got you covered. Buying it in our online service only takes a few minutes.

I want to buy TyEL insurance

What kind of pension security do I get?

The pension system is meant to provide income security in old age, as well as in the event of disability or the death of a family's breadwinner. This means that the pension security entails, for example, old age pension, disability pension and a survivor’s pension.

Read more about the different types of pensions

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Was there anything left to think about the Finnish pension system, Ilmarinen, YEL insurance or TyEL insurance? Don't hesitate to contact us if you have questions.

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