Age limit for the part-time pension will be raised
The age limit for the part-time pension will be raised to 60 years from the
current 58 years. The raise will concern persons born in 1953 and later. Persons
older than this will continue to be covered by the old calculation rules.
At the same time, the pension accrual for the decrease in income during the
part-time pension on the basis of which the part-time pension was originally
calculated will be removed for those who are affected by the raise in the age
limit. The amount of the part-time pension will still be the same as
before, but old-age pension rights will accrue during the time of drawing a
part-time pension only on the basis of the earnings from work.
The accrual during the time of drawing a part-time pension thus diminishes,
but the effect on the old-age pension following the part-time
pension is not very significant. The reason for this is that the full-time
working career will continue for a further two years compared to the typical
situation before the reform (part-time pensions usually start
immediately at the age of 58).
Example of old-age pension following the part-time
pension:
The part-time pensioner’s accrued pension before the start
of the part-time pension is 1,000 eu-ros/month. The stabilised earnings level is
2,500 euros/month and the working hours are cut to half at the start of the
part-time pension. During the time on a part-time pension the earnings are thus
1,250 euros/month and the part-time pension is half of the decrease in income,
i.e. 625 euros/month. The person draws a part-time pension from the age of 60 to
the age of 63. The person’s old-age pension is then for the time of drawing a
part-time pension 3 x 0.019 x 1,250 = 71.25. When adding to this amount the
pension accrued before the start of the part-time pension, the old-age pension
amounts to 1,071.25 euros/month. If the person had worked with a full wage until
the age of 63, the pension would have amounted to 1,142.50 euros/month.
Example of disability pension following the part-time
pension:
The part-time pension recipient in the previous example
became incapable of work after one year of drawing a part-time pension. Before
the onset of disability the person had accrued a pension of 1,000 + (0.019 x
1,250) = 1,023.75 euros/month.
The disability pension includes a pension
component for projected pensionable service, where the earnings used for the
calculation are the average earnings for the five preceding years, i.e. (4 x
2,500 + 1,250)/5 = 2,250 euros/month. Pension rights accrue on this amount at
the rate of 1.5 per cent a year until the age of 63, i.e. 2 x 0.015 x 2,250 =
67.50 euros/month. In total the disability pension amounts to 1,023.75 + 67.50 =
1,091.25 euros/month.
Note! The example has been simplified by excluding the
change in wages, the index adjustments and the life expectancy coefficient. If
they had been taken into account, the old-age pension would have been slightly
higher than the disability pension at the age of 63.
Further information on the part-time pension:
* Osa-aikaeläke ja eläkeuudistuksen tavoitteet; Reports 2/2008 (in
Finnish) >>
* Information leaflet on the part-time pension >>