In order to maintain the correctness of the pension, the amount is annually reviewed with an index. The indexes used in pension reviews are the wage coefficient, the employee pension index, and the national pensions index. The Ministry of Social Affairs and Health will verify the employee pension index and the wage coefficient annually. Kela will verify the national pensions index.
Wage coefficient to be used before granting pension
When you apply for MEL pension, we will check your income earned during your career with a wage coefficient to the level of the first year of pension. In the wage coefficient, an income level change carries an 80% weight, and a price level change carries a 20% weight. This ensures that your new pension is reasonable in relation o the income level you had during your career.
The wage coefficient is also used to review the monetary amounts stated in employee pension legislation according to which the insurance responsibility of the rights to certain benefits are defined.
Employee pension index to review the paid pension
When you are already receiving MEL pension, it will be reviewed with the employee pension index in January of each year. The purpose of the employee pension index is that the pension retains its purchasing power and somewhat follows the changes in the income level. In the employee pension index, a price level change carries an 80% weight, and an income level change carries a 20% weight.
National pensions index to review national pension and Kela benefits
The national pension, guarantee pension, and the majority of Kela-paid benefits are annually reviewed with the national pensions index. The purpose of the national pensions index is to retain the purchasing power of pension or benefit in relation to the price level. The national pensions index is indexed to the living expenses index.
Pension indexes in 2019 and 2018
|Employee pension index|
|National pensions index|
Example: Index review of paid employee pension
The pensioner's pension began in 2013 at EUR 1,600 per month. In the table below, you can see how the pension was reviewed according to the employee pension index in the following two years. The index review is always carried out to the amount of pension paid the previous year.
|Year||Employee pension index||Employee pension/month ||Formula|
|2014||2,509||1,621.98||2,509/2,475 x 1,600 = 1,621.98 |
|2015||2,519||1,628.44||2,519/2,509 x 1,621.98 = 1,628.44 |
|2016||2,519||1,628.44||2,519/2,509 x 1,621.98 = 1,628.44 |
2,534/2.519 x 1,628.44 =