Pension reform 2017
The pension security reform will enter into effect in 2017. The biggest changes concern the age limits and accrual bases for old-age pension. Two new forms of pension will also be introduced: namely career pension and partial early old-age pension. The changes inherent to the reform also concern self-employed persons.
The main policies of the pension reform have just been agreed on, so the details will be further specified as the legislation process proceeds, most likely toward the end of 2015. There is still no way to know the exact extent to which the reform will impact on individual pension security.
A brief overview of the pension reform:
- The earliest eligibility age for old-age pension, which previously was 63 years, will rise by 3 months for each age class until the agreed limit of 65 years. This concerns only those born in the years 1955–1962.
- The pensionable age for those born in 1965 and later will be linked to the average development of the duration of working and retirement, and the necessity to further raise the pensionable age will be reviewed as the pensionable age approaches.
- Pension security begins to accrue from the age of 17. For all ages, pension accrues at a rate of 1.5% of the wages per year. As an exception, those aged 53–62 accrue pension at a rate of 1.7% per year during the years 2017–2025.
- The new career pension will enable those doing strenuous work to retire already at the age of 63, if they have been working for a minimum of 38 years and have a reduced work ability.
- The current part-time pension system will be removed, but this will not affect any pensions currently being paid. From the beginning of 2017, part of one’s accrued pension can be withdrawn as partial early old-age pension already at age 61 and, after the year 2025, at age 62.
More information about the content and impact of the reform will be available online at www.elo.fi once the details of the reform are specified.