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How pension is accrued

Pension is accrued from both earned income and some so-called unpaid periods.

On the basis of earned income

You will accrue employee pension on the basis of your earned income according to accrual percentages indexed to your age.

  • At the age of 18–52, you will earn pension as 1.5% of your annual earned income.
  • At the age of 53–62, you will earn pension as 1.9% of your annual earned income.
  • At the age of 63–68, you will earn pension as 4.5% of your annual earned income.

    If you are already receiving retirement or disability pension and working alongside your pension, you will accrue 1.5% of new pension from this earned income.

    Before the reform of the Seafarer's Pensions Act entering into force in 2016, you can have earned pension according to special accrual percentages if you have had the right to earn a lowered retirement age. The special accrual percentages were 1.6% at the age of 18–52 and 2.0% at the age of 53–62. The raised accrual of those over the age of 63 was the same to everyone. The earned pension will remain.

    For unpaid periods

    You will also accrue pension from periods when you are not paid but you receive a benefit based on earned income. These benefits include
  • daily allowance in accordance with the Health Insurance Act
  • indemnity for loss of earnings or daily allowance in accordance with the Occupational Accidents and Diseases Act or the Motor Liability Insurance Act
  • unemployment allowance
  • rehabilitation and education allowances
  • rotation compensation.

    Of these benefits, 55–117% of the income as grounds for the benefits are taken into account as grounds for accrued pension, depending on the benefit. (E.g. parental allowance 117%, sickness benefit 65%). 1.5% of the valid income is accrued as pension.

    Studying and caring for a child under three years of age also accrue employee pension. In these situations, the income considered as grounds for pension is considered EUR 728.34 per month (2018). In order to receive pension on the grounds of studying, you must complete a degree. The length of studies for which pension is accrued depends on the level of the degree.

    In order to receive pension on the grounds of unpaid periods, you must also have a total of EUR 17,480.28 in earned income accruing employee pension from the duration of your entire career (2018​).

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