Exceptional earnings-related pension index development causes changes to Tyoelake.fi pension calculators
Because of an exceptionally high increase in the earnings-related pension index, the time of retirement matters if it occurs at the turn of the year 2022-2023. This has been taken into account in the form of age group limitations in the pension calculators on Tyoelake.fi. Compensatory information and examples are available on the website.
Due to the rapid rise in prices, the earnings-related pension index will grow clearly more than the wage coefficient at the beginning of 2023. As a result, if a person retires in 2022, they will get a higher index increment than if they retire after the turn of the year (in 2023).
The timing of retirement on a partial old-age pension also makes a difference due to the exceptional index development. The time of retirement affects not only the partial old-age pension amount but also the consequent old-age pension amount.
Access to the pension calculators at Tyoelake.fi has been blocked until further notice for those who reach their retirement age in 2022 or have reached it earlier. This is because the calculators would provide incorrect information on how the pension would be affected if retirement was deferred to 2023. Instead of the pension calculators, we offer information and examples of the effects of the index development.
A person born in 1958 or earlier cannot estimate their old-age pension with the pension calculator. Persons born in 1961 or earlier cannot estimate their partial old-age pension with the calculator.
Retirement should be planned based on one’s own personal situation. More information on how to plan retirement is provided on the pension providers’ websites and pension customer service.
The current projection of the earnings-related pension index by the Finnish Centre for Pensions is around 6.9 per cent. The wage coefficient, on the other hand, is expected to grow by around 3.7 per cent. The examples in Tyoelake.fi are based on these projections. The projections and examples will be updated throughout the autumn. The Ministry of Social Affairs and Health will publish the earnings-related pension indexes at the end of October.
Earnings-related pension indexes
Two indexes affect earnings-related pensions: the earnings-related pension index and the wage coefficient.
- The earnings-related pension index adjusts pensions in payment to secure their purchasing power.
- At the time of retirement, the wage coefficient adjusts career lifetime earnings to the level of the year in which the pension begins.
The earnings-related pension index puts greater weight on price development while the wage coefficient emphasizes earnings development. Both indexes are adjusted annually in January.
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Photo: Katri Lehtola