As a consequence of the COVID-19 pandemic, a significant portion of those seafarers who are working on Finnish passenger ships in international traffic have been partly or fully laid off. The lay-off periods may affect their pensionable age and accrual of pension. The possible impacts are described in the following.

Seafarers have the right to retire with old-age pension at an earlier age than the general pensionable age if they meet the following criteria:

• They have performed service at sea for over 300 months (25 years) at the time of retirement;
• The employment relationship insured under the Seafarers' Pension Act (MEL) is continuing until the date of retirement;
• The employment relationship under MEL will terminate;
• During the three years preceding the termination of the employment relationship, the seafarer has been employed in an employment relationship under MEL for a minimum of 18 months.

It is important to observe that the validity of employment relationship and the accrual of service-at-sea months do not go hand in hand. When the employment relationship is continuing, the lay-off does not affect the meeting of the last mentioned criterion; however, the lack of insured earnings may affect the accrual of the service-at-sea months. The calculation of the service-at-sea months takes into account all calendar months with earnings, regardless of their amount.

By the end of April 2021, approximately 700 seafarers insured by the Seafarers’ Pension Fund (10% of all insured) had earned so many service-at-sea months that they could retire with old-age pension at a lower pensionable age. On average, they were 56 years old and had 30 years of service at sea and 2.5 years until their pensionable age. During the lay-offs in 2020-21, this group had been satisfactorily employed: two thirds of them had been laid off for no more than one month. As concerns the other MEL insured seafarers, service at sea does not influence the pensionable age since they are subject to the general pensionable age. For some 300 seafarers, the entitlement to a lower pensionable age still depends on whether or not they are able to accrue a sufficient number of service-at-sea months by the end of 2024.

The lay-offs affect the pensionable age on a ‘one month for a month’ principle, in other words, one month’s lay-off period will postpone the pensionable age by one month. This is not necessarily true for all cases as the final outcome will also be affected by the individual’s age and the actual number of service-at-sea months at the time of calculation.

Of the 700 seafarers potentially earning a lower pensionable age, some 500 may be affected by the lay-offs in terms of their pensionable age. The rest of them have either already reached their pensionable age or accrued so many service-at-sea months that they have already earned the lowest pensionable age for their occupational group (55 years for crew members and 60 years for officers).

Monthly earnings can be used as the basis to estimate the impact of one lay-off month on future pension amount: 4,000 euro of earnings accrue pension at a rate of approx. 5 euro per month. The decline of the pension amount may, however, be counteracted by the fact that pension will accrue from the earnings that serve as the basis for the earnings-related daily allowances as provided by the unemployment security legislation.

You can check your own pensionable age by using the old-age pension calculator available in the Loki service on the website of the Seafarers’ Pension Fund. The calculation is always based on the most recent register data. A possible lay-off at the time of calculation may have an effect on the calculation. Log in to the Loki online service by using your personal online banking codes.

Check your pensionable age with the pension calculator in the Loki service.