When your employee retires
Your employee can choose to retire on old-age pension at any time between the ages of 63 and 68. When he or she can retire at the earliest and latest, depends on his or her year of birth.
When can an employee retire?
Your employee can retire at the earliest after having reached his or her lower old-age pension age. Alternatively he or she can continue working up until his or her upper old-age retirement age. Your employee may continue working even after that, if that is what you agree, but then you will no longer need to insure him or her under employees’ pension insurance, i.e. TyEL insurance.
You can use the calculators at Työeläke.fi to help you make pension-related estimates. Please note that the estimates generated by the calculators are indicative.
Your obligation to insure ends after the upper old-age pension age
Following the pension reform carried out in 2017, the retirement age will rise gradually. For those born in 1957, the lower old-age pension age is 63 years and 9 months and the upper old-age pension age is 68 years. The year of birth determines the retirement age.
As an employer, you are obligated to insure your employees until they reach their upper old-age pension age. Here you can check your employees’ upper old-age pension age, i.e. the age at which your obligation to insure ends. If your employee was born
- in or before 1957, your obligation to insure ends when the employee has turned 68
- in 1958–1961, your obligation to insure ends when the employee has turned 69
- in or after 1962, your obligation to insure ends when the employee has turned 70.
Follow these steps when your employee retires
When your employee tells you that he or she wishes to retire on old-age pension, urge him or her to apply for it. Old-age pension does not begin automatically. Tell him or her the following things
- Fill in the pension application about one month before you wish your pension to start. Your employment relationship will end before the date when your pension starts. The end date will be agreed on between the employer and the employee.
- File the pension application in Ilmarinen’s online service. In the service, you can see how much pension you have accrued from your employment relationships and you will get the pension decision quickly.
- You will first receive a provisional pension decision from Ilmarinen. If you apply for the pension online, you will receive the provisional pension decision the same day.
Give your employee these links:
When your employee retires, terminate his or her employment relationship. Agree on the end date together with your employee. Choose the last day of a month as the end date because pension always begins at the beginning of the month. This means your employee will receive the first pension payment after his or her last salary payment, and there will be no interruption in his or her income.
Report to the Incomes Register the information concerning the termination of your retiring employee’s employment relationship and the final salary. Report these using the earnings payment report as usual. The information will be forwarded to us at Ilmarinen from the Incomes Register.
Even if an employee continues to work for the same employer after retiring, the end date of the (original) employment relationship must nevertheless be entered into the Incomes Register using the reason code Retirement.
Information on the termination of employment
When reporting the information on the termination of employment, state the end date of employment and the reason for termination. If you pay the final salary in several instalments, state the information on termination of employment in each of your earnings payment reports concerning the final salary.
The final salary is the salary you pay your employee when his or her employment relationship ends. The final salary may include, for example, overtime compensation, holiday bonuses, annual holiday compensation, compensation for accrued time off and other similar payments. The final salary also includes performance bonuses and other earnings that you pay your employee retroactively.
If you pay the final salary in one instalment, report it to the Incomes Register at the same time as you report the information on the termination of employment.
Your employee can retire on old-age pension once he or she has reached his or her lower old-age pension age – or thereafter. The older your employee is when he or she retires, the larger pension he or she will receive. Your employee will submit his or her old-age pension application to Ilmarinen. Read more about old-age pension.
Partial old-age pension
While on a partial old-age pension, your employee can decide how much he or she wants to work. Employees can retire on partial old-age pension at the age of 61. In 2025, the lower age limit for partial early old-age pension will rise to 62. Read more about the partial old-age pension.
Disability pension or cash rehabilitation benefit
Your employee may be eligible for disability pension if he or she has not reached the lower retirement age and his or her work abiliity has weakened due to an illness or injury for at least a year. Your employee can be granted a fixed-term disability pension or a cash rehabilitation benefit when our assessment shows that his or her work ability will improve. The cash rehabilitation benefit is paid for the duration of rehabilitation, which is the time it will take your employee to regain his or work ability. Read more about the disability pension and cash rehabilitation benefit.
Survivors' pension for surviving spouses and children
If your employee passes away, his or her surviving spouse and children may be granted survivors’ pension. Survivors’ pension is applied for by filling in an electronic application. Read more about the survivors’ pension for surviving spouses and children.
Your employee should find out about the years-of-service pension if he or she has had a strenuous and wearing career lasting at least 38 years and an illness that affects his or her work ability. It has been possible to retire on a years-of-service pension as of 1 February 2018. Read more about the years-of-service pension.
Working while on a pension
Your employee can work as much as he or she likes alongside the old-age pension and partial old-age pension, without it affecting the gross pension paid to him or her. On a disability or years-of-service pension, your employee can only earn a specific amount. Your employee can find out about his or her personal earnings limit by logging in to the MyPension service or contacting our customer service. Read more about working while on a pension.
The retirement age is different for each age group
Your employee can check his or her retirement age in the MyPension service.
Applying for pension is easy online
To apply for pension, the employee fills in the application form for the pension in question in the MyPension service.