YEL reform 2028
The government has outlined the next reform of the Self-Employed Persons’ Pensions Act (YEL). The reform is intended to enter into force at the beginning of 2028. A so‑called freedom‑of‑choice model has been proposed as a basis for pension contributions.
The current model
Since the introduction of the Self‑Employed Persons’ Pensions Act (YEL), pension contributions and the benefits based on them have been determined by the value of the entrepreneur’s work input. An entrepreneur’s confirmed income must correspond to the annual salary that would be paid for similar work to an equally qualified person.
The new model
In the proposed model, pension contributions and benefits would be based either on the taxable earned income from business activities or on a calculated confirmed income, similar to the current system. The obligation to take out insurance would still be assessed based on work input. After that, the entrepreneur would choose the basis for their confirmed income for a fixed period of three years at a time.
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What is going to happen next?
The government bill is expected to be sent out for consultation around Midsummer. At this stage, you don’t need to do anything. We will share more information as the reform progresses.
Explore the most read news on this topic
The YEL reform is moving forward – a proposed freedom of choice model for pension contributions
The Government has reached an agreement in its budget framework talks on changes to the Self-employed Persons’ Pension Act (YEL). Under the proposed model, pension contributions and benefits would be based either on taxable earned income from business activities or on a calculated YEL income, as is the case today.
YEL review: Actual earnings and YEL income side by side as the basis for contributions and pensions
In the pension sector, a long-awaited solution is emerging to address the challenges of entrepreneurs’ pensions. The Ministry of Social Affairs and Health has published a review by investigator Jukka Rantala, outlining the need to develop the pension system for entrepreneurs.
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