You can benefit from your pension at the latest when you retire, but earnings-related pensions also provide security in case of a work disability and secure the livelihood of spouses and orphans in the event of the death of the family wage earner.
Pension is accrued from your work. The amount of each pension is individual and is mainly determined by your earnings during your working career and how long you work. Pension accrues from your earnings according to your MYEL insurance (MYEL earnings).
Pensions are not granted automatically and must always be applied for.
Types of earnings-related pensions
You can retire on an old-age pension when you reach the retirement age of your birth year. For example, the minimum retirement age for someone born in 1960 is 64 years and 6 months. At the earliest, your old-age pension can be paid out from the beginning of the month following the month in which you reach your retirement age.
Partial old-age pension
You can receive a partial old-age pension from the age 61 if you do not receive any other type of earnings-related pension. On a partial old-age pension, you can draw 25% or 50% of the pension that you have accrued up to that time. A partial old-age pension paid before you reach the minimum retirement age will permanently reduce your future pension.
Rehabilitation under the earnings-related pension system
The goal of vocational rehabilitation under the earnings-related pension system is to prevent a work disability. Vocational rehabilitation provides support to keep you working when your work ability has been reduced or is declining and disability is imminent in the near future. Vocational rehabilitation may include work try-outs, training for a new occupation or profession, or a business subsidy for a new or existing business, for example.
If you have done work that requires great mental or physical effort for at least 38 years and your ability to work is reduced, you may be eligible for a years-of-service pension from the age of 63. Your ability to work does not have to be as reduced as it does for a disability pension. The amount of mental or physical effort required to qualify for a years-of-service pension is determined on the basis of legal criteria.
A disability pension secures your livelihood if you are unable to work due to an illness or injury. You may be entitled to a disability pension if, according to medical findings, your ability to work has been reduced uninterruptedly for at least one year due to an illness, injury or handicap. To qualify for a full disability pension, your ability to work must have been reduced by at least 60 percent. If your ability to work has been reduced by at least 40 percent, you may qualify for a partial disability pension. A disability pension may also be awarded for a fixed period, in which case it is referred to as a cash rehabilitation benefit.
A survivors’ pension is paid to spouses and orphans to support their livelihoods when the family’s wage earner dies. The survivors’ pension includes the surviving spouse’s pension and the orphan’s pension paid to a child of the deceased and under the age of 20.
Group life insurance
Group life insurance compensation may be paid to family members of a MYEL insurance policyholder, including children under the age of 22, a spouse or a common-law spouse who had a dependent child together with the deceased.
You can read more about the different types of pensions on the website of the Finnish Centre for Pensions