Statutory Earnings-Related Pension Scheme for Public Sector Employees

Mandatory insurance

• All public sector employees (age 17 or older) without minimum insurance limit.
• Insurance obligation ends at age 70 for persons born after 1961.¹

Voluntary insurance

• No possibilities for voluntary insurance in this scheme.

General finances

• Mainly PAYG-financed by pension insurance contributions, partly tax-financed and with buffer funds. Financing mechanisms vary by public sector employer types under JuEL.

Contribution rates

• Fixed share of monthly gross earnings (24.4%; higher for persons aged 53 to 62 until the end of 2025) without contribution assessment ceiling and minimum insurance limit.
• Contributions are shared between the employer (17.25%) and the employee (7.15%, higher for persons aged 53 to 62 until the end of 2025²).³
• Pension benefits for unpaid (non-contributory) periods are financed jointly by all pension providers; contributions for periods of unemployment are paid by the Employment Fund.

Taxation of contribution payments

• Contributions are tax-deductible.

• The administration is centralised and run by one pension provider, Keva.
• Financial matters are taken care of either by Keva, the state or the Church authorities.
• The pension providers are supervised by the ‘Financial Supervisory Authority’ and the Ministry of Finances.
• Certain functions such as the coordination of pension claims from abroad and the coordination of the cooperation between pension providers are handled centrally by a statutory co-operation body, the ‘Finnish Centre for Pensions’.

• Same as for the statutory earnings-related pension scheme for private sector employees  (TyEL).
• Special conditions apply to military personnel with lower retirement ages.
• Currently, retirement ages are lower for certain occupations; transition is ongoing and retirement age will conform with TyEL in the 2030s.

• Same as for the statutory earnings-related pension scheme for private sector employees (TyEL).
• Currently, accrual rates are higher for some persons employed in the public sector since the beginning of the 1990s than in TyEL; transition towards conformity of the accrual rates is ongoing.