Earnings-related pension recipients in Finland

More than half of the new disability retirees get temporary benefits

In 2018, around 19,900 persons retired on an earnings-related disability pension. This was an increase of nearly 1,300 persons compared to the year before. More than half (55%) of the benefits were granted as cash rehabilitation benefits. These benefits have made up more than half of all new earnings-related disability pensions granted since 2012.

The disability pension may be awarded either until further notice or as a fixed-term cash rehabilitation benefit. The cash rehabilitation benefit is granted if there is a chance that the person’s work capacity can be restored at least in part through treatment or rehabilitation. A cash rehabilitation benefit can be granted only if a treatment or rehabilitation plan has been drawn up for the person in question.

More than two fifths (44%) of the new recipients of a cash rehabilitation benefit were diagnosed with a mental disorder. For one quarter of all new recipients of the benefit, the disability was caused by a disease of the musculoskeletal system. All other main disease categories counted for less than 10 per cent each.

The causes for disability of those who were granted a disability pension until further notice were quite different from those who received a cash rehabilitation benefit. Diseases of the musculoskeletal system was the main cause of disability for a clear majority (40%) of the new recipients of a disability pension granted until further notice. Mental disorders was the second largest cause (15%) and diseases of the nervous system the third largest cause (10%) for disability. Nearly as many (9% each) suffered from tumours or diseases of the circulatory system.

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Retirement starts most commonly at age 63

New retirees aged 50-68 years on an earnings-related pension in 2018

The number of people retiring on an earnings-related pension in 2018 was 68,900, down almost 10 per cent from the year before. Almost 25,000 people retired on an earnings-related pension at age 63.

The majority of new retirees, 48,900 persons retired on an old-age pension. Half of them took their pension at age 63. In addition, a total of 10,800 persons took payment of a partial early old-age pension in 2018, almost 90 per cent of them before reaching age 63.

The number of new retirees on a disability pension was 19,900, edging up from the figure in 2017. The number of new disability pensions in 2018 was more than 1,000 higher than the year before, representing an increase of 7 per cent. One-quarter of this increase is attributable to persons under 50 and one-half to persons over 60 years of age.

Persons who have retired on an earnings-related pension, by pension benefit, 2010–2018*

Old-age
pension
Disability
pension  
Special
pension
for farmers
All

|
|
|
|

Part-time
pension
Partial
old-age
pension
2014 50,800 18,800 700 70,300 | 3,400
2015 54,800 18,600 600 74,000 | 3,700
2016 56,800 18,800 200 75,800 | 4,900
2017 56,600 18,600 200 75,400 | 2,300 12,500
2018*  48,900  19,900  200  68,900  |  – 10,800

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Description

Earnings-related pension recipients in Finland

Producer: Finnish Centre for Pensions
Website: Earnings-related pension recipients
Subject area: Social security
Part of the Official Statistics of Finland (OSF): Yes

Description

The statistics offers a general overview of all earnings-related pension recipients in Finland.

Data content

The statistics includes central data on all earnings-related pension recipients, new retirees on an earnings-related pension and the earnings-related pension expenditure in Finland.

Categorizations

private and public sector, pension benefit, gender and age, pension amount, disease classification ICD-10; regional classification: municipality, province, country of residence

Methods of data collection and source

The data on earnings-related pension recipients, new retirees and earnings-related pension expenditure are based on the pension register.

The regional data presented in the statistics are based on the population data of the Social Insurance Institution of Finland, supplemented with data on earnings-related pensions taxable at source and paid abroad, as reported by the pension providers.

Update frequency

The more restricted statistics Earnings-related Pension Recipients in Finland is released once a month. The more comprehensive statistics Pensioners in Finland is released once a year.

Time of completion or release

The monthly statistics is released by the middle of the following month and the annual statistics in the autumn of the year following the statistical year. For a more detailed schedule, consult the Release Calendar.

Time series

The statistics has been produced since 1996. In 2005-2013, the statistics was published under the name Pensioners and Insured in Finland.

The Quality Description of the statistics (section “Coherence and comparability of data”) includes more detailed information on the comparability of the time series.

Key words

Social insurance, pension, earnings-related pension, old-age pension, disability pension, disability pension, unemployment pension, farmers’ special pension, part-time pension, partial old-age pension, retirement

Concepts and Definitions

Age

In the tables on persons having retired on an earnings-related pension, the age used is the age at the start of the pension. In other tables it is the age at the end of the statistical year.

The average age is the arithmetic mean of the ages. For recipients of an earnings-related pension the age is calculated from the age at the end of the statistical year, and for persons who have retired on an earnings-related pension, from the age when the pension starts.

The median age is the age for the middle-most observation in the data.

Domicile, country of residence, county

The domicile of a person is seen to be the domicile on the last day of the year. For pensions paid abroad, the country of residence is the country of residence on the last day of the statistical year.

Countries of residence are categorized according to the country categorization valid at the end of the statistical year. Counties are classified according to the regional classification in force at the end of the statistical year.

Earnings-related pension expenditure

Earnings-related pension expenditure includes all statutory pensions from the private and public sector paid during the statistical year, as well as voluntary, registered supplementary pensions paid by the employer, but not pensions paid by the municipalities according to the old local government regulations.

Main cause of incapacity

By main cause of incapacity to work is meant the main disease which is the basis of the pension. Although the reason for the disability may sometimes be a significant   secondary disease in addition to the main disease, statistics are based solely on the classification of main diseases.

Since 1996, the diagnoses and the corresponding codes are based on the ICD 10 classification of diseases. Disability pensions granted before 1996 are based on the previous ICD 9 classification. The classification is primarily carried out according to the new classification of diseases. The codes according to the old classification have been as closely as possible placed in the correct category in the new classification (see Appendix 1).

New retiree on an earnings-related pension

New retirees receiving a pension based on their own work history are persons whose pension based on their own working career (old-age, disability or special farmer’s pension) has begun during the statistical year.  A further requirement is that the new retiree has not received any pension of the aforementioned types for at least two years.

A scheme-based review is always carried out for the scheme in question. If a person has retired from another sector already prior to the statistical year, and is retiring from another sector during the statistical year, he or she is only registered in the latter sector for the statistical year, no longer in the figure of all who have retired. In other words, a person is only entered in figures relating to the whole earnings-related pension scheme in the statistical year during which the first pension begins. The scheme-specific figures of the tables can thus not be added together.

Persons having retired on an old-age pension are persons whose old-age pension started in the statistical year and who have not received a pension of any type in their own right for at least two years. As regards disability pensions and special pensions for farmers, the precondition is that the persons have not received a pension of this type for two years. As regards the different types of disability pension, the precondition is that the persons have not received a disability pension of any type for two years.

Persons retiring on a part-time pension are not considered as all persons having retired on an earnings-related pension. Persons receiving a part-time pension are not included in the figures until the year when their pension is converted to some other pension based on their own work history, usually an old-age pension.

The partial old-age pension, introduced in 2017, is processed in the same way in the statistics as the part-time pension. That means that persons who have retired on a partial old-age pension in 2017 are not considered new retirees.

Pension benefit

The pension benefits in the earnings-related pension scheme are old-age, disability, special farmer’s, part-time, partial old-age and survivors’ pensions. More detailed information about pension types relating to the statistical year (for example basis for granting and age limits) has been presented in the figures for each statistical year in chapter 1.3 Pension benefits.

Pension sector

The tables in the publication include statistical figures covering the whole earnings-related pension scheme as well as figures by pension sector for the private and the public sector.  More detailed information about the sectors is presented in the figures for each statistical year in chapter 1.1. General.

Recipients of an earnings-related pension are always included in the sector from which he or she receives at least one pension under survey. If a person receives a pension from both sectors, he or she is included in the figures for both sectors, but only once in the figures for the whole earnings-related pension scheme.

Persons who have retired on an earnings-related pension are registered in the sector-specific numbers, if retirement from the sector in question occurs in the statistical year. A person is registered in the numbers for the whole earnings-related pension scheme only once, in the statistical year during which the first pension begins.

A person insured for earnings-related pension benefits is always included in the figures of the sector in which said person works (and/or receives a pension).  If a person is working (and/or receiving a pension) from both sectors, he or she is registered in the figures of both sectors.

Recipient of an earnings-related pension

Persons receiving a pension based on their own work history are those receiving old-age, disability, unemployment, special farmer’s, part-time or partial old-age pension during the last days of the statistical year. All recipients of earnings-related pension includes the aforementioned as well as recipients of survivors’ pensions. The earnings-related pension may be paid simultaneously with several different pension acts and types of pensions.

Size of the earnings-related pension 

All monetary amounts presented in the statistics are gross amounts of monthly pensions. The earnings-related pensions may be reduced by an integration of benefits, if the persons are paid compensations under the Occupational Accidents, Injuries and Diseases Act, the Motor Liability Insurance Act or the Military Injuries Act (SOLITA benefits). The reduction is made to the accrued earnings-related pension. SOLITA benefits may be so high that only a small amount or no earnings-related pension is paid out. Nevertheless, persons who receive no earnings-related pension due to the integration of benefits are still included in all figures in the statistics.

The earnings-related pensions of pension recipients and persons who have retired on earnings-related pensions include the euro amounts from both sectors of all pensions based on their work history and which were in payment at the end of the statistical year: old-age, disability, unemployment and farmers’ special pensions. The pensions include the euro amounts of both basic pensions and registered supplementary pensions. If the pensions of new retirees in the statistical year have ended before the end of the statistical year, the pensions include the amounts of all earnings-related pensions in payment when the pension ended.

Recipients of part-time pensions do not simultaneously receive other earnings-related pensions based on their work history. Therefore, the earnings-related pensions of those who receive and those who have retired on a part-time pension include the euro amounts of the part-time pension only.

In addition to the above, the total earnings-related pension includes any survivors’ pension that the pension recipients may receive. Statistics for the total earnings-related pension are included only in the tables for all earnings-related pension recipients (Tables 2 and 2.1) and earnings-related pension recipients residing abroad (Tables 11 and 12). The total earnings-related pension is not calculated for those who have retired on an earnings-related pension.

The average earnings-related and total earnings-related pensions are arithmetic means. Tables 5 and 16 also show the median pension. The median
pension is the pension observed at the mid-point of the material, i.e. half of the pension recipients receive a pension that is lower than the median and half receive a pension that is higher.

Unpaid period

Period for which a person receives a social security benefit for which pension accrues. Unpaid periods are, for instance, periods of parental allowances, periods of sickness allowance and unemployment allowance.

Quality Description

Quality description: Pensioners in Finland 2018

The statistics Earnings-related pensioners in Finland is published by the Finnish Centre for Pensions.

The Act on the Finnish Centre for Pensions states that the responsibilities of the institution include, for example, the compiling of statistics in its field of operation. The production of the statistics at the Finnish Centre for Pensions is handled by the Planning Department.

The Earnings-related pensioners in Finland is financed by the Finnish Centre for Pensions.

Relevance of statistical information

Statutory pension security in Finland consists primarily of two pension schemes: the earnings-related pension scheme and the national pension scheme. The pensions of the former scheme are based on earnings, while the pensions of the latter scheme are residence-based. Earnings-related pensioners in Finland provides an overview of the pensions paid within the Finnish earnings-related pension scheme.

In the private sector, the earnings-related pension provision is administered by earnings-related pension insurance companies, industry-wide pension funds and company pension funds. The Finnish Centre for Pensions is the central body of the earnings-related pension scheme. One of its assignments is to collect the information required for the administration of earnings-related pension matters for the purpose of handling the tasks prescribed to it.

Earnings-related pensioners in Finland covers the whole statutory earnings-related pension provision, as well as voluntary registered supplementary pension provision financed by the employer. Voluntary non-registered supplementary pensions paid by the employer are not included in the figures of these statistics, nor voluntary pension provision paid by the individuals themselves. In addition, the statistics do not include pensions from the national pension scheme and pension from workers compensation, motor liability and military accident insurance, so-called SOLITA pensions.

The statistics contain figures on the number and median pensions of earnings-related pension recipients and new retirees on an earnings-related pension. The statistics also contain information on earnings-related pension expenditure, earnings-related pensions paid abroad and disability pension decisions.

The main classifier in the statistics is the division of the earnings-related pension scheme into the private and the public sector. In addition, the following classifications are used in the statistics: pension benefit, pension size, gender and age. Disability pensions are classified by disease category. The regional classification for the earnings-related pension expenditure is based on the Finnish regions (http://stat.fi/meta/luokitukset/maakunta/001-2015/index_en.html). Pension recipients abroad are classified by country of residence and country groups.

The country groups are defined in Appendix 2 of Earnings-related pensioners in Finland 2015, page 104 at https://www.etk.fi/en/publications/. The concepts and definitions used in the statistics are presented on the website of the statistics, at https://www.etk.fi/statistics> Pension recipients and insured > Earnings-related pension recipients.

The statistics serves social security specialists, researchers and the media, as well as others requiring information about this field. Equally comprehensive statistical data on Finnish pension recipients is not available elsewhere.

Correctness and accuracy of data

The data of this statistical publication is based on data in the pension register (composite data). The register contains registered data from pension decisions. The data is used to form pension periods and pensions which are registered in the statistics register. This statistics register forms the basis for pension statistics.

The regional data presented in the statistics is based on Kela’s population data. It is supplemented on the basis of the country of tax at source for pensions paid abroad, as reported by the pension providers.

Together with the earnings-related pension providers, the Register Services Department of the Finnish Centre for Pensions is responsible for the contents of the registers, the accessibility, scope, legality and accuracy of the data needed for the implementation of pension provision and the clarification of error conditions in the contents. The handling systems include authenticity and logical checks where the programme requires correction or verification of data. The error messages may also be comments that do not inhibit the registration of data. Arek Oy is responsible for the information technology aspects of the registers.

Arek Oy is a company jointly owned by the pension providers and the Finnish Centre for Pensions.

Flaws detected in the statistics are immediately corrected on the website. In connection with the correction, information on the content and time of the correction is provided. A correction page is added to printed publications that have not yet been distributed. If the error is substantial, a separate bulletin is issued for those who have already received the printed publication.

Timeliness and promptness of published data

The more restricted statistics Earnings-related Pension Recipients in Finland is released once a month. The more comprehensive statistics Pensioners in Finland is released once a year during the first half of the year following the statistical year.  The date of publication of the statistics is presented in the Release Calendar on the website of the Finnish Centre for Pensions at www.etk.fi/statistics, section ‘Release Calendar’.

Coherence and comparability of data

This statistical publication has been produced since 1996. Its time series are mainly comparable from that date. As for the number of earnings-related pension recipients, the time series extends back to the year 1979.

From the beginning, the statistics has covered the numbers of earnings-related pension recipients and new retirees, the mean pensions, as well as the pension expenditure of the earnings-related pension scheme. Over the years, the data content of the statistics has been extended. Data on disability pension decisions in the earnings-related pension scheme was added in 2007.

In 2005—2013, the statistics was published under the name Pensioners and Insured in Finland. As of the statistical year 2014, the data is published in two different statistical publications: Earnings-related pensioners in Finland and Persons insured for an earnings-related pension in Finland.

In 1999, the concept of new retirees was changed. It no longer included persons retiring on a part-time pension. Persons receiving a part-time pension are included in the figures for new retirees when they start to receive some other pension that is based on their own working life, usually an old-age pension. In 1996–1998, new part-time pensioners were counted as pensioners on an earnings-related pension. As of the 1999 statistics, the time series of earnings-related pension retirees have been corrected retroactively. Thus, the 1996-1998 statistics are not comparable in this respect with those of later years.

The partial old-age pension, introduced in 2017, is processed in the same way in the statistics as the part-time pension. That means that persons who have retired on a partial old-age pension in 2017 are not considered new retirees.

The following changes have been made to concepts and classifiers based on legal amendments and feedback from users:

  • Following the 2005 legal reform, pensions are no longer categorized according to how maximal they are.
  • Since 2005, disability pensions have been divided into full and partial pensions.

The statistics use applicable general standard categorizations, e.g. by disease (ICD-10) and region (province, country or residence and country group).

In cooperation with Kela, the Finnish Centre for Pensions produces Statistics on Finnish Pensioners. It covers the pensions of both the earnings-related and the national pension schemes. The figures on recipients of an earnings-related pension, new retirees on an earnings-related pension and earnings-related pension expenditure in those statistics are consistent with the figures in these statistics.

Availability and clarity of data

The statistical data is released on the homepage of the statistics and in publication Earnings-related pensioners in Finland. Some of the data in the statistics is also published in the statistical database of the Finnish Centre for Pensions, at tilastot.etk.fi.

A description of the statistics has been presented on the website of the Finnish Centre for Pensions, at www.etk.fi/statistics/earnings-related-pension-recipients/description.

The statistical service of the Finnish Centre for Pensions provides additional information about the statistics upon request per e-mail at tilastot(at)etk.fi.

 

OUR EXPERTS IN THIS AREA: HEIDI NYMAN, JARI KANNISTO