Pension reform took place in 2017 which gradually rises retirement age, standardizes pension contributions and pension accrual and introduces new pension options.

This guide goes through the changes that concern salary payment.

What does the pension reform contain

The most visible changes for employer and employee are the changed pension contribution. You can read more about them below. Pension contribution rates are unified for employees and for entrepreneurs.

Changes that don't affect salary payment

Pension accrual rates are standardized. Employee's pension accrual will accumulate according to the employee's whole salary. (Does not affect salary payments or salary deductions)
Retirement age will gradually rise to 65 and will be tied to life expectancy coefficient in 2030. (Does not affect salary payments or salary deductions)
New pension options are introduced: Partial old-age pension and Years-of-service pension.
An increment for deferred retirement is introduced. Working after the earliest eligibility age for old-age pension increases pension accrual rate.
A target retirement age will be determined for each age group.

Source: http://www.elakeuudistus.fi/

Pension contributions

Employee contribution

Employee contribution rates change along with the pension reform and they depend on the employee's age. The new pension contribution rates are visible on the table below. The future goal is to unify the contribution rates for everyone and that will be done after the transition period in the year 2025.

Employee’s pension contribution is included in the total contribution. The employer withholds the contribution from employee's salary.

The pension reform includes a transition period 2017-2025 and during that period all people aged from 53 to 62 have 1,5 percent higher contribution rate. Also their pension accrual rate is 1,7 % instead of 1,5%.

Employee contribution percent
Age	2022	2021	2020	2019	2018	2017	2016
17–52 years	7,15 %	7,15 %	7,15 %	6,75 %	6,35 %	6,15 %	5,70 %
53–62 years	8,65 %	8,65 %	8,65 %	8,25 %	7,85 %	7,65 %	7,20 %
63–67 years	7,15 %	7,15 %	7,15 %	6,75 %	6,35 %	6,15 %	7,20 %

Contribution as an entrepreneur

The YEL insurance payments are changed also. The new YEL insurance rates are visible on the table below. The future goal is to unify the YEL payment rates for everyone and that will be done after the transition period in the year 2025.

YEL payment percentages
Age	2022	2021	2020	2019	2018	2017	2016
18–52 years	24,10 %	24,10 %	24,10 %	24,10 %	24,10 %	24,10 %	23,60 %
53–62 years	25,60 %	25,60 %	25,60 %	25,60 %	25,60 %	25,60 %	25,10 %
63–67 years	24,10 %	24,10 %	24,10 %	24,10 %	24,10 %	24,10 %	25,10 %
Starting entrepreneur (22 % reduction)
18–52 years	18,80 %	18,80 %	18,80 %	18,80 %	18,80 %	18,80 %	18,408 %
53–62 years	19,97 %	19,97 %	19,97 %	19,97 %	19,97 %	19,97 %	19,578 %
63–67 years	18,80 %	18,80 %	18,80 %	18,80 %	18,80 %	18,80 %	19,578%

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