Pension Index Adjustments

The purpose of index security for pensions is to ensure that a person retiring may receive a starting pension that is reasonable considering the income level while still working, and to ensure the future purchasing power of the pension in payment.

When determining the starting earnings-related pension, the pension provider adjusts the insured’s wages and income from work during his or her career to the level of the first year of pension by the wage coefficient. Adjustment by the wage coefficient, i.e. indexing, ensures that a person who is retiring will receive a pension that is proportionate to his or her income level while still working.

Following retirement, the pension provider annually adjusts the earnings-related pension in payment at the beginning of January according to changes in the earnings-related pension index. Indexation with the earnings-related pension index secures and even improves the pension’s purchasing power.

The Social Insurance Institution annually adjusts national pensions in payment based on changes in the national pension index at the beginning of January. Indexation preserves the purchasing power of national pensions in relation to changes in consumer prices.

Pension indexes 2018 2017

Earnings-related pension index

2548

(change 0.6%)

2534

(change 0.6%)

Wage coefficient

 1.391

(change 0.1 %)

1.389

(change 1.2%)

National pension index

1617
(change 0,0 %)
 1617

(change -0.9%)

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