Public-sector earnings-related pension contributions

Pension contributions of Keva’s member organisations in 2019

Keva’s member organisations include municipalities and federations of municipalities.

Year Average wage-based contribution, % of gross wage Employee’s contribution,
% of gross wage
Under 53 and 63 or more 53-62 years
2010 24.4 6.75 8.25

The average wage-based contribution (24.4%) consists of the earnings-related pension contribution and the disability pension contribution. The wage-based contribution includes the employee’s contribution and is 23.5 per cent of the wages for all employers.  The disability pension contribution varies for larger employers due to the disability pensions granted to their employees. On average, it is 0.9 per cent of the wages. For small-scale employers and for 5 years for new employers, the disability pension contribution is 0.9 per cent of the wages.

In addition, some employers pay a contribution based on pension expenditure to a total amount of  706 million euros (an estimated 3.95% of the wage sum) in 2019. The contribution is used to cover the gap between the contribution level under the Employees Pensions Act and a sustainable contribution level of the pension system of Keva’s member organisations.

The employer’s pension contribution is of the same size as the pension contribution of private sector employees under the Employees Pensions Act. The average employee contribution is 7.15 per cent of the wage sum of the pension system of Keva’s member organisations.

The total contribution accrual is estimated at 28.35 per cent of the combined wage sum of Keva’s member organisations.

The State

Year

Average wage-based contribution,
% of gross wages

Employee contribution,
% of gross wages

Under 53 and 63 or more 53-62 years
2019 24.4 6.75 8.25

The State pension system includes only a wage-based pension contribution. It corresponds to the wage-based pension contribution of Keva’s member corporation. The average employee contribution is 7.25 per cent of the wage sum of the State’s pension system.

All contributions paid by State employers are paid to the State Pension Fund. Keva collects the contributions from the employers.

The State Pension Fund pays Keva a compensation confirmed by the Ministry of Finances for handling state pensions.

The State pensions are paid from reserved funds in the state budget. Assets collected through pension contributions are transferred annually from the State Pension Fund to the budget to an amount corresponding to approximately 40 per cent of the actual pension expenditure. The additional 60 per cent is paid straight from the state budget for the year in question.

The Evangelical-Lutheran Church

Year Employer’s contribution
paid by Church parishes
Employers’s contribution paid by the
Central Church Fund and
church associations
Employee’s contribution
% of gross wages Under 53
or 63 and over
53-62 years
2019 28.7 34.5 6.75 8.25

The wage-based pension contribution paid by the Evangelical-Lutheran Church is 28.7 per cent for Church parishes and federations of parishes and 34.5 per cent for the Central Church Fund and Church associations.

The wage-based contribution includes the employee’s contribution, which is the same as for private sector employees under the Employees Pensions Act. The average employee contribution is 7.30 per cent of the wages of the Church’s pension system.

In 2019, the overall contribution is 28.95 per cent of the wage sum. In addition, the parishes pay a separate pension fund contribution that amounts to 5.0 per cent of the church tax for 2017.

The pension contributions of the Evangelical-Lutheran Church are paid to the Church Pension Fund. Keva collects the contributions from the employers. The Church Pension Fund collects the pension fund contribution from the employers.

The Church Pension Fund recompenses Keva for handling the pension matters of  the Evangelical Lutheran Church.

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