The retirement age will rise by 3 months per age cohort for those born in 1955 and later from 63 years until it is 65 years. The age at which the insurance obligation ends and no new pension accrues will also rise. Within the national pension scheme, the old-age retirement age is 65 years.

The retirement age of those born in 1965 and later will be linked to life expectancy as of 2030, providing life expectancy changes. The retirement age of the national pension scheme will rise correspondingly.

Each cohort will have its own target retirement age. By working until the target retirement age, the reducing effect of the life expectancy coefficient on the pension can be offset.

The old-age pension paid from the earnings-related pension scheme can start from the month after the insured has reached their retirement age and stopped working in the position from which they are retiring. In other words, retiring on an old-age pension requires that the employee no longer continues the employment from which they retire. The self-employed, on the other hand, may continue their self-employment when they retire on an old-age pension.

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Exceptions to the retirement ages of state employees and sailors

In general, the retirement age under the Public Sector Pensions Act is the same as that under the Employees Pensions Act, and the retirement age rises in the same way in the public sector as in the private sector. However, some public sector employees, as well as sailors insured under the Seafarer’s Pensions Act, may have the right to an old-age pension at an earlier age.

Some state and local government employees may be entitled to an old-age pension at an occupational retirement age during a transition period. For example, policemen and Customs employees may have reduced retirement ages if their employment has begun before 1 July 1989 and continues uninterruptedly until their retirement age. The occupational retirement ages will also rise gradually for those persons who, before the 2017 rules came into force, would have reached their retirement age in 2018 or later.

For persons employed by the State, regulations stipulate that employees of the Finnish Defence Forces and the Finnish Boarder Guard will continue to be able to retire early on an old-age pension.

The pension scheme of sailors was reformed as of the beginning of 2016. After a transition period, the right to retire early will be abolished. Sailors have the right to retire early on an old-age pension, at the age they have earned by the end of 2024. The precondition for early retirement is that the sailor meets all the other requirements for early retirement. One such requirement is that the sailor must continue to be in an employment covered by the Seafarer’s Pensions Act until retirement.

The retirement age of the majority of sailors has already been the same as that under the Employees Pensions Act. Roughly 10 per cent of the currently working sailors have the right to early retirement. The reform has also taken into account the rising retirement age of the 2017 pension reform.  At its lowest, the so-called earned retirement age under the Seafarers’ Pensions Act has been 55 years for crewmen and 60 years for officers.

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Deferring the old-age pension or taking out part of the pension early

As of the beginning of 2017, the increment for late retirement is calculated from the age group’s retirement age to the time at which the pension starts. The pension is then increased permanently by 0.4 per cent per month that the pension is deferred. At the same time, new pension accrues for working, up until the age at which the insurance obligation ends.

Before 2017, the increment for late retirement was paid if retirement was postponed beyond the age of 68. Very few people have postponed their retirement past the age of 68.

It is possible to take out 25 or 50 per cent of the old-age pension, either early or late. It can be taken early at the age of 61. In that case, the part of the pension that is taken out early is permanently reduced by 0.4 per cent for each month from when the pension is drawn to the month after which the person reaches their retirement age. The age limit for the partial early old-age pension will rise for those born in 1964 or later.

Those born in 1951 were the last age group that could take out an early old-age pension at the age of 62. In that case, the pension was decreased with a permanent reduction of 0.6 per cent per month taken early.

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Finnish Centre for Pensions – Central body of and expert on statutory earnings-related pensions