When your employee retires

Learn about the different types of pension.

Read about the types of pension

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Retirement – what do you need to know?

Employees can choose to retire on old-age pension at any time between the ages of 63 and 68. If an employee’s work capacity has weakened due to an illness or injury, he or she can apply for disability pension. Following the pension reform carried out in 2017, the retirement age will rise gradually. The new age limits apply to those born in or after 1955.

When your employee retires – follow these steps:

End the employment relationship

Retiring on old-age pension requires the termination of the employment relationship. Agree with your employee on what date his or her employment shall end. It is a good idea to end the employment relationship at the end of the month, since pension always begins at the start 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.

Instruct the employee to apply for old-age pension

Old-age pension does not start automatically; instead, your retiring employee must apply for it. Encourage your employee to submit the application approximately one month before the employment relationship ends. The easiest way to do it is online.

Report the final earnings and the end of employment

Report the wages and salaries paid in 2018 to Ilmarinen. Report the employee’s final earnings only when you know the precise amount. At the same time, report the termination of the employment, if the employment relationship ends during 2018.

Report the wages and salaries paid in 2019 to the Incomes Register. Also report the end date of employment and the reason for termination.

Please also report the final salary or wages paid at the end of the employment relationship. Ilmarinen will receive all the necessary information for calculating the pension from the Incomes Register.

Options other than old-age pension

 

Your employee can also retire on pension other than old-age pension, for example partial old-age pension or survivors’ pension. Your employee can also apply for rehabilitation, cash rehabilitation benefit, disability pension or years-of-service pension.

Pension reform 2017

 

Pensions and age limits changed as a result of the pension reform carried out in 2017. By 2025, the lower age limit for old-age pension will rise to 65, and there will also be some changes to the early retirement pensions.

Types of pensions and working while drawing pension

Old-age pension

You can retire on old-age pension once you have reached your lower age limit for retirement – or at a later date. The older you are when you retire, the bigger your pension will be. Employees themselves are responsible for submitting their old-age pension application to Ilmarinen.

Partial old-age pension

On partial old-age pension, you decide how much you want to work. You can retire on partial old-age pension at the age of 61. Partial old-age pension became on option as of 1 February 2017.

Disability pension or the cash rehabilitation benefit

If your work capacity has weakened, read more about disability pension and the cash rehabilitation benefit.

Survivors’ pension for surviving spouses and children

Survivors’ pension for surviving spouses and children helps when a spouse or parent passes away. It can be granted to the surviving spouse and children of an employee. If you are widowed, apply for survivors’ pension easily by filling in an online application.

Years-of-service pension

Find out more about the years-of-service pension if you have had a strenuous and wearing career lasting at least 38 years and an illness that has affected your work capacity. You can switch to the years-of-service pension as of 1 February 2018.

Working while drawing pension

It is possible to continue working while collecting old-age pension. The TyEL obligation to insure also applies to old-age pensioners under the age of 68 who are in an employment relationship.