Farmers have their own pension act

The Farmers’ Pension Insurance Act (MYEL) governs the pensions of farming entrepreneurs, including farming entrepreneurs who:

  • live in Finland,
  • work as farmers, forest property owners, fishermen and reindeer herders,
  • work as independent entrepreneurs,
  • are between 18 and 69 years of age,
  • have been self-employed without interruption for at least four months after turning 18, and
  • have a MYEL income of at least EUR 3,828.13 per year (in 2018).

Grant recipients also insure their earned income under MYEL.

The age at which the insurance obligation ends depends on when the farmer was born:

Year of birth Age when the insurance obligation ends
1957 or earlier 68
1958-1961 69
1962 – 70

The MYEL insurance must be taken out within six months of initializing farming operations that meet the above-mentioned criteria.

The basis for the farmer’s insurance is the MYEL income. This income forms the basis for the self-employed person’s

  • pension,
  • compensations and allowances, and
  • insurance contributions.

Income from agriculture and forestry consists of the acreage of farmed land and forest, as well as related farming activities possibly carried out at the farm. A farming entrepreneur is insured if the farm comprises cultivated land and forest of at least five MYEL hectares. Income earned from farming is divided between the spouses to the degree that they participate in work at the farm.

There are different regulations governing the income of fishermen and reindeer herders. Fishermen are insured as self-employed persons if they are charged tax on the income from fishing. Reindeer herders are insured based on MYEL if they carry out reindeer farming on their own account or on behalf of a reindeer owners’ association.

The Farmers’ Social Insurance Institution (Mela) administers MYEL insurance. In addition to the statutory pension security and accident insurance, Mela also manages other social security and services for farming entrepreneurs.

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The State finances the lion’s share of farmer’s pensions

The MYEL insurance contribution is determined based on the average TyEL contribution, just like the YEL contribution. However, the contribution is graded according to earnings from work. The earnings from farming are comparatively low, which is why farming entrepreneurs end up paying significantly smaller insurance contributions than other entrepreneurs. In 2018, the average contribution under MYEL is approximately 13.8 per cent of the MYEL income (and 13.6% for grant recipients).

The State finances the most part of farmer’s pensions since there are over twice as many pension recipients as there are farming entrepreneurs still working, which means that the insurance contribution income is low. In 2015, the insurance contribution income under MYEL was around 188 million euros. However, the pension expenditure was many times higher, around 784 million euros. In 2016, the State’s component of the pension expenditure was around 80 per cent of the total pension expenditure.

Grant recipients insured under MYEL

Grant recipients have been insured under MYEL since early 2009.

A grant recipient who lives in Finland and who has got a grant from Finland in 2009 or later must take out pension insurance if:

  • the grant is intended for at least four months of artistic or scientific work in Finland,
  • the grant amounts to at least 1,276.05 euros, which corresponds to an annual earning of at least 3,828.13 euros (at 2018 prices), and
  • the grant recipient is between 18 and 69 years,
  • the grant recipient has not retired on an old-age pension.

The age at which the insurance obligation ends depends on when the grant recipient was born:

Year of birth Age when the insurance obligation ends
1957 or earlier 68
1958-1961 69
1962 – 70

The insurance obligation applies to those who have got a personal grant as well as to those on a team grant. Grants for undergraduate and postgraduate degrees (Master’s and below) and grants that simply cover costs, such as travel grants, cannot be insured.

For more information on how to insure grants, go to the website of the Farmers’ Social Insurance Institution Mela.


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