Getting to know pension terminology

An earnings-related pension is a pension accrued from the work you have done. You may also accrue earnings-related pension during some periods when you do not receive any wages, such as while studying for a degree or receiving certain social benefits. The earnings-related pension provides financial security when you can no longer work because of old age or disability. The earnings-related pension will also secure your income if a wage earner in your family passes away. The earnings-related pension may be paid as an old-age pension, partial early old-age pension, disability pension, years-of-service pension or survivors’ pension. Read more about earnings-related pension in Työeläke.fiOpens in a new window..

The earnings-related pension is paid by a pension provider. Pension providers include earnings-related pension providers, special earnings-related pension providers, company pension funds and industry-wide pension funds. Keva manages public sector pensions.

The guarantee pension supplements small earnings-related pensions and national pensions. The purpose of the guarantee pension is to safeguard a minimum pension when all other earned pensions remain below a certain limit.

The guarantee pension is paid by Kela. To qualify for the guarantee pension, you must first apply for all pensions to which you may be entitled. Only persons resident in Finland qualify for the guarantee pension. For more detailed terms and information about the guarantee pension, see the Kela websiteOpens in a new window..

The national pension will safeguard your livelihood if your earnings-related pension is small or you do not receive any earnings-related pension at all. Your pension may also be a combination of the earnings-related pension and national pension, in which case the national pension will supplement the earnings-related pension to the extent that it remains below a certain limit. Your earnings-related pension and any other pensions you receive will affect the amount of your national pension.

The national pension is paid by Kela. Only persons resident in Finland qualify for the national pension. For more specific conditions and amounts, see Kela’s Old-age pension pageOpens in a new window..

You may also receive a national pension based on incapacity for work. For more information, see Rehabilitation subsidy and disability pension on Kela’s websiteOpens in a new window..

Old-age pension means a pension that you can receive once you reach a certain age.

The old-age pension may be:

• An earnings-related pension paid by a pension provider
• A national pension paid by Kela
• Both of the above

Typically, an old-age pension consists of an earnings-related pension based on gainful employment paid by a pension provider. If you do not receive any earnings-related pension or your earnings-related pension is small, you can receive a national pension and possibly also a guarantee pension from Kela. Another condition is that you must live in Finland.

Read more about the old-age pension:

• Old-age pension paid as earnings-related pension – Työeläke.fiOpens in a new window.
• Old-age pension paid as national pension – Kela.fiOpens in a new window.

Partial early old-age pension is an earnings-related pension paid by a pension provider.  

A partial early old-age pension:

• Allows you to claim part of your pension before full old-age pension
• Allows you to work less based on an agreement with your employer
• Will reduce your future pension if you claim the partial early old-age pension before your retirement age

There is a minimum age limit depending on your year of birth for the partial early old-age pension. This is not the same as your retirement age for the old-age pension. You can check the age limit using the Check your retirement age calculator on the frontpage of Työeläke.fiOpens in a new window..

You can choose whether to receive a quarter or half of your accrued old-age pension as your partial early old-age pension.

When receiving the partial early old-age pension, you can work as much as you want, or stop working altogether. No health reasons are required to work less or stop working altogheter. If your ability to work has been reduced due to an injury or illness, a partial disability pension may be a more pertinent option for you.

Read more about partial old-age pension in Työeläke.fiOpens in a new window..

You do not qualify for a partial old-age pension if you are already receiving another earnings-related pension from Finland or farmers’ early retirement aid, or if your disability pension is dormant because you are employed.

If you are self-employed, you can retire just like a regular employee. You can retire on an old-age pension at the earliest when you have reached the retirement age for your age group.

You accrue earnings-related pension when running your own business, and you must take care of your pension insurance yourself. Self-employed persons usually take out either self-employed persons’ pension insurance (YEL) or farmers’ pension insurance (MYEL). The higher pension contributions you have paid, the higher your pension. Your earnings-related pension is calculated based on all your earnings during your career, both as an employee and as a self-employed person.

If you are self-employed, you can receive your old-age pension while continuing your entrepreneurial activities. Closing down your business is not a condition for the old-age pension, but your obligation to pay pension insurance will end once you start receiving your old-age pension. 

Read more about pensions for the self-employed at Työeläke.fi.Opens in a new window.

More pension terms

• Työeläke.fi glossaryOpens in a new window.