Työeläkkeen

Työeläkkeen is the Finnish term for earnings-related pension. It is a statutory pension that forms the primary source of income for most Finnish retirees. The system is funded by contributions made by both employers and employees, as well as by self-employed individuals. The amount of the työeläkkeen is based on an individual's earnings history throughout their working life.

The Finnish earnings-related pension system is managed by several pension providers, with Ilmarinen, Varma, Elo, and Veritas being the largest. These institutions invest the collected contributions to ensure the long-term sustainability of the pension system. The pension accrues based on an annual accrual rate, which is a percentage of the annual earnings. This rate has been adjusted over time, reflecting changes in life expectancy and economic conditions.

Eligibility for a työeläkkeen typically begins at the statutory retirement age, which is gradually being raised. Individuals can also retire early under certain conditions, such as long-term unemployment or reduced work capacity, though this usually results in a lower pension amount. The Finnish social security system also includes a basic pension, which is a guaranteed minimum income for all residents, regardless of their earnings history. The työeläkkeen supplements this basic pension, providing a more substantial income in retirement. Calculations and administration of the työeläkkeen are governed by specific legislation, ensuring fairness and transparency.