Ireland Employer Compliance Hub: Employment Regulations & Payroll & Tax

Part I – General Provisions
Chapter 1 – Purpose of the Act
Section 1
Purpose of the Act
This Act provides for the private-sector employee’s right to an old-age pension, part-time pension,
rehabilitation and disability pension as well as the employee beneficiary’s right to a survivors’ pension.
The employer is obligated to arrange and pay for pension provision for its employees in accordance with
this Act for work carried out in Finland, unless otherwise provided herein. The employee is obligated to
participate in his or her own pension provision by paying the employee’s pension contribution.
The employer may arrange pension provision as provided in this Act with pension insurance companies as
referred to in the Pension Insurance Companies Act (354/1997), an industry-wide pension fund as
referred to in the Insurance Fund Act (1164/1992), or in a company pension fund as referred to in the
Pension Fund Act (1774/1995). The Finnish Centre for Pensions operates as a liaison body for all pension
providers. The functions and administration of the Finnish Centre for Pensions are laid down in the Act
on the Finnish Centre for Pensions (397/2006).
Section 2
Key definitions
For the purposes of this Act:
1) pension provider means a pension insurance company, industry-wide pension fund or company pension
fund as provided in section 1(3);
2) employment relationship means an employment relationship based on section 1 of the Employment
Contracts Act (55/2001);
3) earnings-related pension means a pension according to the acts referred to in section 3;
4) unpaid period means a period during which the employee has been paid maternity, special maternity,
paternity or parental allowance or sickness allowance, partial sickness allowance or special care
allowance, according to the Health Insurance Act (1224/2004), alternation allowance according to the Act
on Job Alternation Leave (1305/2002), income-based daily allowance or study allowance according to the
Unemployment Security Act (1290/2002), earnings support according to the Act on the Public Service
Employment (1295/2002) , adult training allowance according to the Act on Adult Training Allowance
(1276/2000), rehabilitation allowance according to the earnings-related pension acts or the Act on the
Social Insurance Institution of Finland’s Rehabilitation Benefits and Rehabilitation Allowance Benefits
(566/2005), compensation for loss of earnings according to the Act on Rehabilitation Compensated Based
on the Accident Insurance Act (625/1991) or the Act on Rehabilitation Compensated According to the
Motor Liability Insurance Act (626/1991) or daily allowance according to the Accident Insurance Act
(608/1948), the Motor Liability Insurance Act (279/1959) or the Compensation for Military Injuries Act;
(1211/1990) (1274/2006)
5) accrued pension means pension that has accrued from earnings, unpaid periods as referred to in section
4 and compensation accrued from state funds according to the Act on the Compensation from State
Finances of Pension Accrual for Periods of Caring for a Child Aged under Three and for Periods of Study
(644/2003);
6) primary benefit means a benefit as referred to in sections 92 and 93, paid in full regardless of the
amount of earnings-related pension and deducted from the benefits based on this Act;
7) social security regulation of the European Union means Council Regulation (EC) No 1408/71 on the
application of social security schemes to employed persons, to self-employed persons and to members of
their families moving within the Community.
8) EU and EEA countries mean countries in which the EU Regulation on social security is applied;
9) social security agreement means an international agreement on social security which is binding on
Finland;
10) theoretical pension means a notional pension, for which work under the earnings-related pension acts
and working time spent in EU and EEA countries is calculated as working time according to this Act.
For the purposes of this Act, pension contingency refers to:
1) meeting all the requirements for an old-age pension;
2) meeting all the requirements for a part-time pension according to section 16;
3) the beginning of disability according to section 35(1); or
4) the death of the person through whom the benefit is derived.
Section 3 (1274/2006)
Earnings-related pension acts
Earnings-related pension acts include the earnings-related pension acts for the private and public sectors.
In addition to this Act, private sector earnings-related pension acts include:
1) The Seamen’s Pensions Act (1290/2006)
2) The Self-Employed Persons’ Pensions Act (1272/2006); and
3) The Farmers’ Pensions Act (1280/2006).
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Public sector employees’ pension acts include:
1) the Local Government Pensions Act (549/2003) and the implementing act of the Local Government
Pensions Act (550/2003);
2) the State Employees’ Pensions Act (1295/2006) and the implementing act of the State Employees’
Pensions Act (1296/2006);
3) the Evangelical Lutheran Church Pensions Act (261/2008) and the Evangelical Lutheran Church
Survivors’ Pensions Act (258/1970);
4) the Act on the Orthodox Church (985/2006); (1164/2007)
5) Pension provisions based on section 13 of the Act on the Social Insurance Institution of Finland
(731/2001);
6) the provision on pensions laid down in section 11(2)(6) of the Act on the Bank of Finland (214/1998);
and
7) the Provincial Administration Act (ÅFS 54/2007) given in the province of Åland for the purpose of
applying certain current state rules to state pensions.
The Evangelical Lutheran Church Pensions Act 261/2008 repeals the previous pension act of the
Evangelical Lutheran Church and the Evangelical Lutheran Church Survivors’ Pensions Act.
Chapter 2
Scope of application
Section 4
Employment relationship
The employee is entitled to pension provision as provided in this Act on the basis of his or her
employment relationship.
This Act does not apply to employment relationships:
1) before the calendar month following the month during which the employee turns 18 years of age;
2) after the calendar month during which the employee turns 68 years of age;
3) based on which the employee is entitled to a pension in accordance with another earnings-related
pensions act as referred to in section 3; or
4) where the employee is working as a crew member on a Finnish ship listed in the catalogue of merchant
vessels according to the Act on Improving the Competitive Ability of Sea-trafficking Ships (1277/2007)
(1281/2007)
This Act does not apply to:
1) an employee to whom the employer pays less than a total of EUR 41.89 per calendar month in earnings
from work as defined in this Act; or
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2) an employee who is not subject to Finnish legislation, based on the provisions of the EU’s social
security regulation or the social security covention governing the legislation to be applied, or;
3) an employee whose foreign employer has posted him or her to work in Finland, and whose work in
Finland in the service of said employer lasts a maximum of two years.
If Finnish legislation is applied to the employee referred to in section 3(3) based on the provisions
regarding the applicable legislation of the EU’s social security regulation or of a social security
agreement, or if the employee is covered by Finnish social security legislation immediately prior to the
start of the work in Finland, this Act will, however, be applied.
Section 5
Working abroad
This Act applies to an employee working abroad who is subject to Finnish legislation on the basis of
provisions governing the applicable legislation of the EU’s social security Regulation or a social security
agreement, provided that the other preconditions for the scope of application for this Act are otherwise
met.
This Act also applies to other employees sent by a Finnish employer to a country where the EU’s social
security Regulation or a social security agreement are not applied, provided that:
1) the employee works either in the service of the posting Finnish employer or in the service of a foreign
company that belongs to the same financial entity as the Finnish employer;
2) the employee’s employment relationship with the posting Finnish company continues for the duration
of the posting abroad; and
3) the employee is covered by Finnish social security legislation when going abroad to work.
In addition to what has been provided above in subsections 1 and 2, this Act also applies to other
employees working abroad that the Finnish employer insures on the basis of section 150(2-3 and 5) of
this Act.
The Finnish Centre for Pensions may, on application, exempt the employer from the insurance obligation
laid down in this Act for situations referred to in subsection 2, as provided in section 150(1).
Section 6
Exempting a foreign employer from the insurance obligation
The Finnish Centre for Pensions may, on application, exempt a foreign employer from the insurance
obligation as provided in section 149 of this Act.
Section 7
Person in a senior position
The employee referred to in section 4 above is equated with a clerical employee in a senior position in a
limited company or a person in a senior position in another type of organization, even if he/she is not in
an employment relationship with the limited company or organization, except if:
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1) the clerical employee in a senior position in a limited company owns, alone or together with family
members, more than half of the company’s share capital;
2) the number of votes owned by the persons referred to in paragraph 1 is more than half of the total
number of votes from all the shares; or
3) a person in a senior position in another organization can be seen to possess corresponding authority in
the association as referred to in paragraph 1 or 2.
A partner in an unlimited partnership or a partner in another organization or group/consortium who is
personally responsible for the obligations and commitments of the organization or group is not considered
equal to an employee as referred to in section 4.
Section 8
Person in position of trust
This Act applies to persons in a position of trust, if the company governed by private law or organization
paying his or her fees also insures him or her for this position in accordance with this Act.
A position of trust is considered to be:
1) a position to which a person has been elected for a set period of time, or until further notice, with the
purpose of representing a certain community, group of people or expertise; and
2) in which he or she does not have an employment relationship or a public-service employment
relationship, or operates as a self-employed person as referred to in the pension acts. (1274/2006)
Everything provided in this Act regarding employees also applies to persons in positions of trust. The
provisions of this Act on employment relationships also apply to positions of trust. Fees received for
holding a position of trust correspond to earnings received from an employment relationship. A pension
based on a position of trust corresponds to a pension based on an employment relationship.
Section 9
Insurance for athletes
This Act is not applied to sporting activities. Pension provision for athletes is provided in the Act on
Accident and Pension Provision for Athletes (575/2000).
Section 10
Decision regarding the scope of application of this Act
The Finnish Centre for Pensions decides whether this Act can be applied to work on the basis of an
application of the party ordering the work, the employee, the person carrying out the work or the pension
provider.
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PART II
PROVISIONS ON PENSIONS AND REHABILITATION AND THEIR IMPLEMENTATION
Chapter 3
Pension and rehabilitation benefits
Old-age pension
Section 11
Right to an old-age pension
Employees are entitled to retire on an old-age pension between the ages of 63 and the beginning of the
month following the 68th
birthday, on an old-age pension taken early at the age of 62, or a postponed oldage pension at the beginning of the month following the 68th
birthday. The prerequisite for granting an
old-age pension and an old-age pension taken early is that the employee is no longer in the employment
relationship from which he or she is retiring.
If the employee retires on an old-age pension or on an old-age pension taken early before the age of 62
pursuant to the Seamen’s Pensions Act, he or she has the right to retire on an old-age pension according to
this Act at the retirement age provided in the Seamen’s Pensions Act. In this case, the amount of pension
provided in this Act is converted actuarially to correspond to the effective retirement age of the employee.
More detailed provisions on converting the pension amount and coefficient tables used in the conversion
process are provided in the decree of the Ministry of Social Affairs and Health.
Section 12
Amount of old-age pension
If the old-age pension commences at the beginning of the calendar month following a birthday between
the ages of 63 and 68, the amount of old-age pension constitutes the amount of pension accrued by the
time the retirement commences.
When old-age pension is taken early, the pension is permanently reduced by 0.6 per cent for each month
taken early before the month following the 63rd birthday (early retirement reduction.) The early
retirement reduction is calculated on pension accrued by the time the pension starts.
The early retirement reduction is not implemented if an employee receiving unemployment allowance on
the basis of the right to continued unemployment allowance in Chapter 6 section 9(2) of the
Unemployment Security Act retires on an old-age pension at the age of 62.
If an old-age pension is deferred, the pension is increased by 0.4 per cent for each deferred month until
the beginning of the month following the 68th
birthday (increment for deferred retirement). The increment
for deferred retirement is calculated on pension accrued by the end of the month during which the person
in question turns 68 years of age.
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Section 13
Start of the old-age pension
The old-age pension and early old-age pension start from the calendar month following the month during
which the employee has reached the age giving entitlement to an old-age pension or an early old-age
pension and has finished the work on the basis of which he or she is applying for the old-age pension.
However, an old-age pension or early old-age pension is not granted retroactively for more than three
months preceding the pension application month, unless a valid reason exists.
If the employee continues working past his or her 68th
birthday, the old-age pension is granted from the
beginning of the calendar month following the month the pension is applied for.
Pension accrued on earnings from an employment relationship that started during old-age retirement is
granted on application, at the earliest from the beginning of the calendar month following the employee’s
68th
birthday.
A disability pension becomes an old-age pension from the beginning of the calendar month following the
employee’s 63rd birthday.
Section 14
Discontinuing the old-age pension
The employee may apply for a discontinuation of an old-age pension if he or she has been granted a cash
rehabilitation benefit based on a temporary disability which, when the cash rehabilitation benefit was
granted, is expected to continue past the employee’s 63rd birthday. The discontinuation of the old-age
pension shall be applied for within one month of the end of the estimated disability period, and the oldage pension is discontinued at the end of the disability period.
Part-time pension
Section 15
Concepts relating to the part-time pension
When determining the right to a part-time pension under this Act, the following are referred to:
1) gainful employment: work insured on the basis of earnings-related pension acts;
2) full-time work: gainful employment as referred to in paragraph 1, where the employee’s working hours
are equal to the maximum working hours normally applied to a full-time employee in the relevant field; if
the employee is simultaneously gainfully employed in several places, his or her work is considered fulltime if the combined working hours amount to at least 35 per week.
Part-time work, as referred to later in sections 16, 17, 20, 21 and 24, means work insured on the basis of
earnings-related pension acts that the employee carries out while being partially retired. Such part-time
work is comparable to part-time work carried out in an EU or EEA country.
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Section 16(4)(1) and section 17 below refer to stabilised earnings, which means projected earnings, as
referred to below in section 76, on the basis of which the employee’s disability pension would be
calculated if the employee had become disabled at the start of the part-time retirement.
Section 16
Right to a part-time pension
Employees between the ages of 58 and 67 who have transferred to part-time work are entitled to receive a
part-time pension provided that:
1) the employee has been in full-time gainful employment for at least 12 of the preceding 18 months
immediately prior to the start of the part-time retirement;
2) the employee has earnings under the earnings-related pension acts or corresponding acts for 15
calendar years immediately preceding the part-time retirement at an amount corresponding to the number
60. This figure is arrived at by dividing the earnings from each calendar year by EUR 41.89 times 25,
rounding down the quotient received to the closest whole number, which can be a maximum of 12, and by
adding together the quotients of the different years;
3) the employee does not receive other pension based on work or a corresponding benefit from a foreign
or international organization or an institution of the European Community; and
4) the employee is not entitled to receive a part-time pension under the public-sector pension acts on the
basis of full-time service covered by the aforesaid pension acts, following the end of an employment
relationship pursuant to this Act.
Work in EU or EEA countries is comparable to work referred to previously in subsection 1, paragraphs 1
and 2.
If the employee has received daily allowance under the Health Insurance Act, salary during sick leave,
loss of earnings compensation based on the Motor Liability Insurance Act, or an allowance based on the
provisions of the Workers’ Compensation Insurance Act during the 18-month period referred to in section
1(1), this 18-month period is correspondingly prolonged; however, for a maximum of six months.
The part-time work requirement of a part-time pension is met, if:
1) the employee’s earnings have decreased to the extent that the earnings from his/her part-time work
constitute 35–70 per cent of the employee’s stabilised earnings and a corresponding change has also taken
place in the working hours;
2) the employee is not away from work for a consecutive period longer than six weeks; this period of
absence does not include annual leave or time for which the employee has been paid an allowance based
on the Health Insurance Act, salary during sick leave, loss of earnings compensation based on the Motor
Liability Insurance Act, or an allowance based on the provisions of the Workers’ Compensation Insurance
Act, only insofar as the employee has received the aforementioned allowances for a period of a maximum
of 12 months.
If the decrease in the employee’s earnings deviates from the shortening of the working hours due to the
fact that earnings from full-time gainful employment has included salary-related overtime compensation,
compensation for work carried out on Sundays, nights or in shifts, or other such special additions or
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compensation which are not included in earnings received from part-time work, such additions or
compensations are not taken into account when evaluating whether the preconditions provided in section
4(1) have been met.
Section 17
Amount of the part-time pension
The amount of part-time pension is 50 per cent of the difference between stabilised earnings from fulltime work under the earnings-related pension acts and earnings from part-time work under the earningsrelated pension acts (reduction in earnings.)
If, prior to the part-time work, the employee has simultaneously been in gainful employment under two or
more earnings-related pension acts, the amount of part-time pension is 50 per cent of the difference
between the stabilised earnings of these employments and the earnings from part-time work. Of such a
part-time pension, the share of part-time pension based on this Act equals the share of earnings from work
insured according to this Act is, in earnings based on these Acts, and which have been taken into account
in the stabilised earnings and based on which the part-time pension is granted.
The maximum amount of part-time pension is still 75 per cent of the pension accrued by the employee by
the start of the part-time pension according to the earnings-related pension acts and pensions according to
the Act on Pension Compensation for Caring for a Child under Three or for Studies paid for by
government funds. If the primary benefit is to be deducted from the pension in the manner prescribed in
sections 92 or 93, the maximum amount of the part-time pension is then calculated from the reduced
pension. The maximum amount of part-time pension is reviewed if the recipient of the part-time pension
is granted a primary benefit as referred to in sections 92 or 93, or if the amount of such a benefit changes.
The pension mentioned above in section 3 is considered equal to pension accrued for the employee in EU
or EEA countries or in a country with which Finland has a social security agreement.
If the employee has the right to receive a part-time pension also pursuant to another pension act, and the
maximum amount of 75 per cent mentioned in subsection 3 decreases the amount of part-time pension,
the deduction will be divided between these acts in proportion to the earnings taken into account in the
stabilised earnings.
Section 18
Start of the part-time pension
The part-time pension will begin at the beginning of the month following the month during which the
employee meets the preconditions laid down in section 16; however, no earlier than the beginning of the
month following the application. Part-time pension cannot, however, be granted retroactively.
Section 19
Part-time pensioner’s obligation to report
The recipient of a part-time pension is obligated to report the following to the pension provider:
1) changes in working hour arrangements;
2) wage adjustments outside of collective agreements;
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3) the ending of an employment relationship or entrepreneurship, or the beginning of a new one;
4) changes in entrepreneurship;
5) the start of a new earnings-related pension or corresponding benefit from an EU or EEA country;
6) absences longer than six weeks, provided that the absence is not due to annual holidays or an illness on
the basis of which the recipient of a part-time pension receives an allowance based on the Health
Insurance Act, salary during sick leave, an allowance based on the provisions of the Accident Insurance
Act, or indemnity for loss of income granted on the basis of the Motor Liability Insurance Act; and
7) the beginning of or change in a primary benefit.
Section 20
Adjusting a part-time pension
The amount of part-time pension is adjusted if:
1) a permanent change has occurred in earnings during part-time work for the recipient of a part-time
pension, which significantly differs from the general salary development; or
2) the recipient of the part-time pension is entitled to a part-time pension according to an earnings-related
pension act on the basis of which he or she was not previously entitled to a part-time pension.
The adjustment is carried out from the beginning of the calendar month following the change, or, if the
change takes place on the first day of the calendar month, from this day.
When the amount of part-time pension is adjusted, the earnings that are considered to be stabilised
earnings are the earnings on the basis of which the part-time pension was first determined.
Section 21
Suspending a part-time pension
If earnings from the employee’s part-time work or absence from work changes temporarily in a manner
that prevents the preconditions for part-time work provided in section 16(4) from being met, payment of
the part-time pension will be suspended through notification by the pension recipient or at the initiative of
the pension provider. Payment will be suspended from the next possible payment period, provided that
the reason for suspending the pension remains in force. The part-time pension that has been paid out will
be recovered, in the manner provided in section 126, for the period during which the preconditions for
receiving the part-time pension have not been met.
The suspended part-time pension will be paid out again once the preconditions for receiving part-time
pension have again been met, and on the notification of the pension recipient. If there has been no request
to restart payment of the suspended part-time pension within six months of the suspension of the parttime pension, the pension is suspended from the date it was discontinued.
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Section 22
Discontinuing and restarting a part-time pension
The part-time pension is discontinued from the beginning of the month following the month during which
the employee no longer meets the preconditions for receiving the pension according to section 16(4),
unless otherwise provided in section 21. If this day turns out to be the first day of the calendar month, the
part-time pension will, however, be discontinued from that day onwards. A part-time pension can also be
discontinued retroactively.
If the employee’s part-time pension has been discontinued, the employee is entitled to receive the parttime pension again when he or she meets the preconditions for receiving it. If the part-time pension has
been discontinued for a maximum of six months, the new part-time pension following the discontinued
part-time pension will be determined on the basis of the stabilised earnings from stabilised full-time
employment on which the previous part-time pension was also based.
Section 23 (1164/2007)
Disability pension and old-age pension following a part-time pension
If the employee receiving a part-time pension is granted a disability pension or an old-age pension for a
period during which a part-time pension has already been paid, the part-time pension will be taken into
account as a partial payment of the disability pension or old-age pension.
Section 24
Converting a part-time pension into an old-age pension
If the employee continues in part-time work until turning 68, the part-time pension is converted at the age
of 68 into an old-age pension of the same size as the part-time pension. Once the employee stops parttime work, the old-age pension is recalculated on application.
Rehabilitation within the earnings-related pension scheme
Section 25
Right to rehabilitation within the earnings-related pension scheme
An employee under the age of 63 is entitled to receive appropriate vocational rehabilitation for preventing
disability or improving working or earning capacity, if:
1) an appropriately diagnosed illness, handicap or injury is likely to lead to the threat of disability in the
manner referred to in section 35(1);
2) the employee has insured earnings from working to a minimum amount of EUR 25,133.40 during the
reference period referred to in section 76, and (1164/2007)
3) the employee is not entitled to rehabilitation according to rules on rehabilitation pursuant to accident
insurance or motor liability insurance.
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When evaluating the appropriateness of rehabilitation, the employee’s age, profession, previous activity,
training and establishment in working life are taken into account, as well as whether the vocational
rehabilitation will likely lead to a return to work or to a type of work suitable to the employee’s state of
health. Additionally, when evaluating the appropriateness of rehabilitation, another issue taken into
account is whether vocational rehabilitation would serve to postpone the retirement of the employee.
Threat of disability means a situation where it is likely that the employee would be granted a full or parttime disability pension in a few years’ time without vocational rehabilitation, despite taking into account
the possibilities of implementing treatment and medical rehabilitation.
The reference period for projected pensionable service referred to above in paragraph 2 of subsection 1 is
determined so as to assume that the employee has become unable to work as the rehabilitation application
becomes pending. (1164/2007)
What is provided in subsection 1 is also applied to the rehabilitation of an employee who is unable to
work as defined in section 35(1). In that case, the earnings referred to in paragraph 2 of subsection 1 are
determined in the same manner as the earnings for the projected pensionable service in the person’s
disability pension. (1164/2007)
Section 26
Content of vocational rehabilitation and the rehabilitation plan
Vocational rehabilitation means a work trial, preparation for work, training leading to work or a
profession, and support for starting or continuing a business activity. The employee may be compensated
for necessary and unavoidable costs resulting from professional rehabilitation.
Prior to the start of vocational rehabilitation, the employee shall have a vocational rehabilitation plan
(rehabilitation plan), the preparation of which may be supported by the pension provider.
Section 27
Preliminary ruling on the right to earnings-related pension rehabilitation
The employee is entitled to receive a preliminary ruling on whether the requirements for receiving
earnings-related pension rehabilitation are satisfied. The preliminary ruling is binding for the pension
provider if the employee submits a rehabilitation plan to the pension provider within nine months of the
preliminary ruling becoming legally valid.
Section 28
Rehabilitation allowance
The employee is entitled to receive rehabilitation allowance for the calendar months during which he or
she has been fully or partly prevented from carrying out gainful employment due to vocational
rehabilitation.
The amount of rehabilitation allowance is as great as the total amount of earnings-related pensions
increased by 33 per cent, to which the employee would be entitled had he or she been declared incapable
of work and thus entitled to a full disability pension when the rehabilitation application becomes pending.
If the employee has gone on sick leave while in an employment relationship, and the need for
rehabilitation existed at the start of the sick leave, the rehabilitation allowance still amounts to the total
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amount of earnings-related pensions increased by 33 per cent, to which the employee would be entitled if
he or she had become incapable of work in a manner giving entitlement to a full disability pension at the
start of the sick leave.
Section 29
Partial rehabilitation allowance
If the employee earns more than half of the stabilised earnings during professional rehabilitation, the
amount of rehabilitation allowance will be half of the rehabilitation allowance referred to in section 28.
Section 30
Rehabilitation increment for disability pension recipients
If the employee receives a disability pension in accordance with section 35, he or she is not entitled to
rehabilitation allowance as defined in section 28. Recipients of a disability pension are paid a
rehabilitation increment in addition to the disability pension for the duration of the vocational
rehabilitation. The rehabilitation increment constitutes 33 per cent of the amount of the disability pension.
Partial disability pension can be paid as a full pension for the duration of the vocational rehabilitation,
thus increased as provided in subsection 1.
Section 31
Rehabilitation assistance
Rehabilitation allowance may be granted to the employee in the form of a discretionary rehabilitation
assistance the size of the disability pension for the period between the rehabilitation decision being issued
and the rehabilitation starting, as well as for the period between periods of rehabilitation. Discretionary
rehabilitation assistance may be also granted for the purpose of preparing a rehabilitation plan as referred
to in section 26(2).
The rehabilitation assistance is paid for a maximum of three months per calendar year, calculated
separately for the period between the rehabilitation decision being issued and the start of rehabilitation,
and for the time period between rehabilitation periods. Rehabilitation assistance can also be paid for a
longer period of time, if this is considered justifiable in order to secure the rehabilitation.
Section 32
Discontinuing the rehabilitation allowance and rehabilitation increment of a person receiving a disability
pension
The rehabilitation allowance or rehabilitation increment paid to a person receiving a disability pension
may be discontinued if the recipient refuses vocational rehabilitation or stops the vocational rehabilitation
without due cause.
The employee is not entitled, without due cause, to a disability pension before his or her right to
rehabilitation allowance pursuant to the employment pension acts or the the Act on the Social Insurance
Institution of Finland’s Rehabilitation Benefits and Rehabilitation Allowance Benefits has ended.
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Section 33
Pension provider’s obligation to report
The pension provider shall report all its decisions regarding vocational rehabilitation and rehabilitation
allowance and increases to the Social Insurance Institution of Finland.
Section 34
Other provisions concerning rehabilitation
The provisions of this Act on applying for a disability pension, determining the pension on previous
grounds, the lump sum increase, the consideration of changes in salary and price levels, the deduction of
primary benefits, payment, reviewing the disability pension and changing its amount, the increase for
delay, recovery, the provision and receipt of information, appealing, and the notification obligation of the
disability pension recipient apply to the rehabilitation allowance, rehabilitation increment and their
recipient, unless otherwise provided in this Act. Compensation for the costs of vocational rehabilitation
paid without grounds may be recovered in accordance with the provisions in this Act regarding the
recovery of pension paid without grounds. (1164/2007)
The rehabilitation allowance and increment may also be paid for a period shorter than one month. The
period of sickness allowance taking precendence over the disability pension pursuant to the Health
Insurance Act does not affect the beginning of the rehabilitation allowance. Pension is not accrued during
the period of rehabilitation allowance pursuant to section 68, and rehabilitation benefits are not used as
basis for the survivors’ pension. New pension accrues from work carried out during the rehabilitation
period in accordance with the provisions of section 64.
Disability pension
Section 35
The right to a disability pension
An employee is entitled to a disability pension if his or her working capacity is estimated to have
decreased by at least two-fifths as a result of an illness, handicap or injury, during an uninterrupted period
of at least one year. The disability pension is granted as a full pension if the working capacity of the
employee has been weakened by at least three-fifths. In other cases, the disability pension is granted as a
partial disability pension.
When evaluating the decrease in working capacity, the employee’s remaining ability to acquire earnings
by means of available work that the employee can reasonably be expected to do is taken into account.
Other factors considered include the employee’s formal training, previous activities, age, residence and
other comparable issues. If the working capacity varies, the employee’s annual earnings are taken into
account.
In addition to the provisions of subsection 2, the vocational nature of the disability is taken into account
when evaluating the entitlement to a disability pension of an employee who has turned 60 years of age.
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Section 36
Investigating rehabilitation possibilities
Before the pension provider makes a decision on a disability pension, it shall ensure that the employee’s
possibilities of rehabilitation have been investigated.
Section 37
Disability pension on the basis of pension granted pursuant to public sector earnings-related pension acts
The employee is entitled to receive a disability pension if he or she has been granted a disability pension
based on a later employment relationship or public-sector employment relationship following the end of
the work covered by this Act pursuant to:
1) Section 35(1)(2) of the State Employees’ Pensions Act; (1274/2006)
2) section 24(1)(2) of the Local Government Pensions Act;
3) the provisions of section 1 of the Evangelical Lutheran Church Pensions Act that correspond to the
provisions referred to above in paragraph 1; or
4) the provisions of section 13 of the Act on the Social Insurance Institution of Finland that correspond to
the provisions referred to above in paragraph 1.
The employee is also entitled to a disability pension when the amount of pension per month based on
private-sector earnings-related pension acts is not more than EUR 688.02 and he or she, after the end of
work covered by this Act, has been granted a disability pension on the basis of a later public-service
employment relationship or employment relationship on the grounds of disability that started during the
employment relationship pursuant to:
1) section 35(1)(1) of the State Employees’ Pensions Act; (1274/2006)
2) section 24(1)(1) of the Local Government Pensions Act;
3) the provisions of section 1 of the Evangelical Lutheran Church Pensions Act that correspond to the
provisions referred to above in paragraph 1, or
4) the provisions of section 13 of the Act on the Social Insurance Institution of Finland that correspond to
the provisions referred to above in paragraph 1.
Section 38
The amount of disability pension
The amount of a full disability pension is the total amount of the pension accrued by the end of the year
preceding the pension contingency and the projected pension according to section 66. A partial disability
pension amounts to half of the full disability pension.
15
Section 39
Preliminary ruling on the right to a partial disability pension
The employee is entitled to receive a preliminary ruling on whether he or she meets the preconditions for
receiving a partial disability pension as referred to in section 35(1). The preliminary ruling is given by
the pension provider competent to decide on the pension application should the employee apply for a
pension rather than a preliminary ruling.
The preliminary ruling is binding on the pension provider if the pension application on which it is based
is made within nine months of the preliminary ruling becoming valid, or within a longer period of time as
agreed between the employee and his or her employer.
Section 40
Pension provider’s medical expert
One or several certified medical doctors shall take part in the preparation of cases that include disability
and rehabilitation issues as well as other medical issues. The pension provider’s medical expert can
record his or her opinions in the documents without adhering to the formalities regarding medicolegal
certificates and statements as provided in section 23 of the Act on Healthcare Professionals (559/1994).
Section 41
Commencement of a full disability pension
A full disability pension may start at the earliest at the beginning of the month following the end of the
period of sickness allowance preceding payment of the disability pension as referred to in Chapter 12,
section 3 of the Health Insurance Act.
However, a full disability pension begins at the start of the month following the onset of the disability, if:
1) the pension application has been made before the Social Insurance Institution of Finland has confirmed
the primary period of sickness allowance and an allowance paid for an uninterrupted period of at least one
month for the period following the onset of disability has not been granted by the end of the second
calendar month following the submission of the application; or
2) the allowance application for the period following the onset of the disability has been rejected, and the
employee has not been granted an allowance to be paid for an uninterrupted period of at least one month
for the period following the rejection of the application.
If the employee is entitled to receive a benefit paid from abroad that corresponds to the allowance
pursuant to the Health Insurance Act, it will be taken into account when establishing the starting date of
the disability pension, in the same way as when establishing the allowance pursuant to the Health
Insurance Act; however, for no longer than up to end of the maximum payment time under the Health
Insurance Act.
16
Section 42
The start of a partial disability pension
A partial disability pension starts at the beginning of the month following the pension contingency.
Section 43
Retroactive payment of a disability pension
A disability pension is not paid out retroactively for a period longer than six months prior to the pension
application month without good cause.
If a disability pension is granted retroactively, it will not be paid for the period during which the employee
has received a rehabilitation allowance under the earnings-related pension acts or the Act on the Social
Insurance Institution of Finland’s Rehabilitation Benefits and Rehabilitation Allowance Benefits, or
compensation for loss of earnings under the Act on Rehabilitation Replacing Compensation of Earnings
Losses on the Basis of the Accident Insurance Act, or on the basis of the Act on Compensatory
Rehabilitation on the Basis of the Traffic Insurance Act.
If disability pension is granted retroactively as a partial disability pension or a full disability pension
pursuant to section 41(2), and an allowance or partial sickness allowance pursuant to the Health Insurance
Act has been paid for the same period, disability pension to an amount that exceeds the allowance amount
is paid out for this period. (1274/2006)
Section 44
Duration of the disability pension
The disability pension is granted until further notice or for a set time as a cash rehabilitation benefit.
If the working capacity of the employee has decreased over a period of time comprising at least one year,
he or she is entitled to receive a cash rehabilitation benefit in order to restore working capacity for as long
a period of time as he or she is estimated to remain disabled as specified in this Act.
When granting the cash rehabilitation benefit, the pension provider shall ensure that a treatment or
rehabilitation plan has been drawn up for the employee. A cash rehabilitation benefit may also be granted
to a disabled employee while the preparation of a treatment or rehabilitation plan is underway.
Section 45
Obligation to inform of the recipient of the disability pension
The recipient of a disability pension is obligated to inform the pension provider of the return of his or her
working capacity, the return to gainful employment and the discontinuation of the rehabilitation.
17
Section 46
Clarification of continued disability
If the pension provider has good reason to assume that the pension recipient’s working capacity has
returned, the pension recipient is obligated, on instruction from the pension provider, to submit to a
medical examination by a certified medical expert named by the pension provider or by a rehabilitation or
research facility named by the pension provider, in order to clarify whether the disability is continuing.
The pension provider is obligated to compensate any reasonable costs possibly arising from the
examination and any related travel costs.
Section 47
Reviewing the right to a disability pension
If the working capacity of the recipient of the disability pension changes, his or her right to receive the
disability pension is reviewed on his or her own application or at the initiative of the pension provider.
When evaluating changes in, or the return of working capacity of a disability pension recipient, the
changes that have occurred in the employee’s earnings are taken into account. The employee is not
entitled to a full disability pension during a period when his or her earnings exceed the established
average earnings of the period preceding the disability by more than 40 per cent, or during partial
disability pension periods when his or her earnings exceed 60 per cent of the aforementioned average
earnings.
Section 48
Changing the amount of disability pension
If the working capacity of an employee receiving a full disability pension changes so that he or she it
entitled to a partial disability pension, and the change is expected to last for at least a year, the full
disability pension is changed into a partial disability pension from the beginning of the following month.
If the working capacity of an employee receiving a partial disability pension changes so that he or she is
entitled to a full disability pension, and the change is expected to last for at least a year, the partial
disability pension is changed into a full disability pension. The full disability pension starts pursuant to
the provisions of section 41. The partial disability pension is paid until the full disability pension starts.
Section 49
Discontinuing a disability pension
If the working capacity of the disability pension recipient returns to such an extent that he or she no
longer meets the preconditions for receiving the pension, the disability pension is discontinued from the
beginning of the next calendar month following the return of his or her working capacity.
If the disability pension is discontinued or the cash rehabilitation benefit ends, the pension may be
continued for a period of time even shorter than one year in the form of a cash rehabilitation benefit the
size of a partial disability pension for the purpose of supporting a return to work.
18
Section 50
Suspending payment of a disability pension
The payment of disability pension may be suspended if the pension recipient:
1) is in gainful employment and the earnings received from this temporarily exceed 60 per cent of the
stabilised average earnings of the period preceding the disability;
2) does not agree to submit to an examination ordered by the pension provider in accordance with section
46, not, however, if there is an acceptable reason;
3) does not submit the results of the examination referred to in section 46 to the pension provider within a
reasonable time frame; or
4) refuses the rehabilitation or training arranged by the pension provider without good cause.
Section 51
Retroactive adjustment of a disability pension
The pension may be discontinued or adjusted, or the payment may be suspended retroactively for a
maximum of one year. This period of one year is calculated from the beginning of the calendar month
following the pension recipient’s application for an adjustment or the adjustment measures taken by the
pension provider. If payment of the disability pension has been suspended, the pension is still adjusted or
discontinued from the date it was suspended.
Section 52
Converting a disability pension into an old-age pension
A full disability pension is converted into an old-age pension, and a partial disability pension into an oldage pension corresponding to a full disability pension from the beginning of the month following the
month during which the pension recipient turns 63 years of age.
The employee is entitled to receive a pension accrued on the basis of work carried out during the period
of the disability pension on application, however, no earlier than from the start of the month following the
individual’s 63rd
birthday. The precondition is that the employee is no longer in the employment
relationship that he or she is going to retire from.
Instead of a disability pension, the pension is calculated and granted as an old-age pension from the
beginning of the month following the 63rd
birthday, if:
1) the employee has turned 63 prior to the end of the primary period as referred to in section 3 of Chapter
12 of the Health Insurance Act; or
2) the primary period is not confirmed for the employee according to section 3(2) of Chapter 12 of the
Health Insurance Act, since the employee has turned 63 years of age.
19
Section 53
Guidance on rehabilitation
If the application for a disability pension or rehabilitation within the earnings-related pension scheme is
rejected, the pension provider shall ensure that the employee is informed of other rehabilitation
possibilities and that he or she is guided towards other rehabilitation that meets his or her needs, or to
other services, in co-operation with the parties arranging them. The pension provider shall also comply
with the provisions in the Act on Cooperation on Client Services within Rehabilitation. (497/2003).
Survivors’ pension
Section 54
Survivors’ pension and recipients of a survivors’ pension
The person through whom the benefit is derived is an employee whose pension has accrued pursuant to
this Act and after whose death survivors’ pension will be paid to the beneficiaries as provided below.
The beneficiary is a person entitled to receive a survivors’ pension following the death of the person
through whom the benefit is derived. Based on the preconditions listed below, the benefactors include the
surviving spouse, the children of the deceased and the surviving spouse, as well as the former spouse of
the deceased.
Survivors’ pension is paid in the form of a pension for the surviving spouse and as an orphan’s pension.
A person who has intentionally caused the death of the deceased by means of a criminal act is not entitled
to a survivors’ pension.
Section 55
Pension right of the surviving spouse
The surviving spouse is entitled to a surviving spouse’s pension if he or she has married the deceased
before the deceased person’s 65th
birthday and has had, or has, a child with the deceased .
A surviving spouse for whom marriage was entered into prior to the 50th
birthday of the surviving spouse
and the 65th
birthday of the deceased and had continued for at least five years is also entitled to a
surviving spouse’s pension, if:
1) the surviving spouse has turned 50 at the time of death of the deceased; or
2) at the death of the deceased, the surviving spouse was receiving a disability pension pursuant to an
earnings-related pension act or the National Pension Act (568/2007), which had continued for at least
three years. (1164/2007)
The surviving spouse is not entitled to a surviving spouse’s pension pursuant to subsection 1 if the child
has been given up for adoption by someone outside the family prior to the death of the deceased, and not
as a child of the deceased whom the surviving spouse has adopted following the death of the deceased.
20
If, on the basis of a previous marriage, the surviving spouse has the right to receive a survivors’ pension
under the earnings-related pension acts, he or she is not entitled to a new survivors’ pension.
Section 56
Child’s pension right
If the person through whom the benefit is derived has died before the child has turned 18, the following
are entitled to an orphan’s pension:
1) the child of the deceased; and
2) the child of the surviving spouse who lived in the same household as the deceased and the surviving
spouse at the time of death.
The orphan’s pension is primarily granted after the death of the child’s own parent. The right to an
orphan’s pension cannot be had simultaneously after the death of more than two persons through whom
the benefit is derived. If a child receiving an orphan’s pension after the death of two persons through
whom benefit is derived later receives an orphan’s pension after the death of his or her own parent, the
orphan’s pension first granted after the death of some other person through whom the benefit is derived is
discontinued at the time when the orphan’s pension after the death of the child’s own parent begins.
Section 57
Pension right of the former spouse
The former spouse of the person through whom the benefit is derived is entitled to a surviving spouse’s
pension if the deceased, at the time of death, was obligated by a decision or verdict of a court of law, or a
decision confirmed by the social welfare board, to pay the former spouse regular alimony. The rights of
the former spouse to a surviving spouse’s pension are governed by the provisions on surviving spouses
and spousal rights.
Section 58
Start of a survivors’ pension and retroactive pension payment
The survivor’s pension is paid from the beginning of the month following the death of the person through
whom the benefit is derived. For a child born after the death of the person through whom the benefit is
derived, the survivors’ pension is paid from the beginning of the month following the child’s birth.
The survivors’ pension is not paid out retroactively for a period longer than six months prior to the
pension application month without good cause.
Section 59
Obligation to notify
The recipient of a surviving spouse’s pension is obligated to notify the pension provider if he or she enters
into a new marriage.
If a child receiving an orphan’s pension is adopted by someone other than the surviving spouse of the
deceased or his or her spouse, the adoptive parents are obligated to notify the pension provider about the
adoption of the child.
21
Section 60
Discontinuing a survivors’ pension
The surviving spouse’s pension is discontinued if the surviving spouse enters into a new marriage prior to
turning 50 years of age.
The orphan’s pension is discontinued once the child turns 18 or is adopted by a person other than the
surviving spouse of the deceased or his or her new spouse.
Section 61
The granting of a survivors’ pension for a set time
If information on the death of the person through whom benefit is derived cannot be presented, but it is
probable that the pension recipient has died by cause of drowning, some other accident or some other
similar reason, a survivors’ pension may be granted for a set period of time.
When a survivors’ pension is granted for a set period of time pursuant to subsection 1, the earningsrelated pension of the deceased is discontinued from the date on which the survivors’ pension starts.
Section 62
Paying a surviving spouse’s pension as a lump sum payment
When the surviving spouse’s pension is discontinued in accordance with section 60, the surviving spouse
is paid a lump sum payment which is equal to the amount of surviving spouse’s pension that he or she
would have received for a period of three years.
The basis for a lump sum payment is the monthly pension paid last, or, if the pension provider functions
as the last pension provider under section 107, the total amount of pensions it pays per month.
Chapter 4
Determining the pension
Accrual of pension
Section 63
The basis of pension accrual
Pension is accrued:
1) From earnings as specified in sections 70 and 72, which the employee has earned from the beginning
of the calendar month following his or her 18th
birthday until the end of the month of his or her 68th
birthday;
2) from unpaid periods referred to in section 74; and
3) from periods on a disability pension and a part-time pension as provided under this Act.
22
Earnings from the year during which the disability began do not accrue pension if, when determining the
pension, the projected pensionable service has been included as giving entitlement to a pension on the
basis of the provisions of section 66.
Section 64
Pension accrual from earnings from work
Pension accrues from earnings on which the annual pension is based (annual earnings), as referred to in
sections 70 and 72:
1) at 1.5 per cent until the end of the calendar month during which the employee has turned 53 years of
age;
2) at 1.9 per cent from the beginning of the calendar month following the 53rd birthday of the employee
until the end of the calendar month during which the employee turns 63;
3) at 4.5 per cent from the beginning of the calendar month following the 63rd birthday of the employee
until the end of the calendar month during which the employee turns 68.
When the accrual percentage changes during the calendar year, as mentioned in subsection 1, pension
accrual is determined on the basis of an average accrual percentage for earnings earned from other
periods than after the start of the old-age pension. The average accrual percentage is calculated by taking
into account the accrual percentages of subsection 1 in relation to the number of calendar months of a
calendar year to which the accrual percentages relate.
If the employee is working in another EU or EEA country than Finland after having turned 53, a separate
supplement calculated on the basis of the difference between the accrual percentage referred to in
subsection 1, paragraphs 2 and 3 and the accrual percentage referred to in subsection 1, paragraph 1 is
added to the theoretical pension. The separate supplement is calculated on the basis of earnings from
work in Finland.
Section 65
Pension accrual during unpaid periods
Pension accrues at a rate of 1.5 per cent on income that forms the basis of the benefit received for the
employee’s unpaid periods during each calendar year, as referred to in section 74.
Section 66
Determining the pension for projected pensionable service
When determining a disability pension, the period giving entitlement to a pension is calculated from the
beginning of the calendar year during which the employee has become disabled until the end of the
calendar month during which the employee turns 63 years of age (projected pensionable service). The
precondition for receiving a pension component for projected pensionable service is that the employee
has earnings from work under the earnings-related pension acts to a total sum of at least EUR 12,566.70
from the ten calendar years preceding the year during which the disability began.
Projected pension accrues on the earnings forming the basis of the projected pension as referred to in
section 76:
23
1) at 1.5 per cent per year insofar as the projected pensionable service is included in the pension until the
month during which the age of 50 has been reached;
2) at 1.3 per cent for each year insofar as the projected pensionable service is taken into account from the
beginning of the calendar month following the 50th birthday until the end of the month of the 63rd
birthday.
Section 67
Pension accrual from work carried out while receiving a pension
Pension accrues at 1.5 per cent of the annual earnings on which the pension is based, and which the
pension recipient earns during periods on a disability pension, old-age pension or corresponding pension
paid from abroad, pursuant to the earnings-related pension acts.
Section 68
Pension accrual from a period when a disability pension has been terminated
If an employee who has received a disability pension is later granted an old-age or disability pension on
new grounds, the period giving entitlement to a pension will also include the time during which the
employee received disability pension. When calculating pension from this period, the projected
pensionable earnings of the disability pension that has been terminated are used as the basis.
On the basis of the aforementioned subsection 1, pension accrues from earnings that form the basis of the
pension component for the projected pensionable service of the disability pension from the start of the
year of the onset of the disability until the last month of the disability pension:
1) at 1.5 per cent per year insofar as the period until the end of the month during which the age of 50 has
been reached is included in the pension;
2) at 1.3 per cent per year insofar as the period is counted from the beginning of the calendar month
following the 50th birthday until the end of the month of the 63rd birthday.
If the employee received a disability pension pursuant to another earnings-related pension act in addition
to the disability pension under this Act, the earnings for the projected pensionable service under this Act
of the disability pension that has been terminated have the same relative share of the earnings for
projected pensionable service of the disability pensions received by the employee as the share of the
earnings under this Act of the total amount of earnings under the acts on the earnings-related pension
during the reference period referred to in sections 76 and 78.
If the employee has received a disability pension without due cause, this pension period will not be
included as giving entitlement to pension when calculating the new pension.
Section 69
Pension accrual from part-time work and part-time pension
Pension accrues from the earnings that form the basis of the benefits referred to in section 74 from
earnings from part-time work carried out alongside part-time retirement as well as from unpaid periods
during part-time work, in accordance with sections 64 and 65.
24
Old-age pension accrues from periods of part-time pension at 0.75% per year from the reduction in
earnings referred to in section 17(1), on the basis of which the employee’s part-time pension was
calculated for the first time.
When disability pension is calculated on the basis of a disability that started during a period of part-time
pension, pension from the period of part-time pension accrues at 1.5 per cent of the reduction in earnings.
If, when determining disability pension, pension accrued from part-time work carried out alongside a
part-time pension is calculated to also include the projected pension, the projected pension is calculated
from the reduction in earnings according to accrual percentages provided in section 66.
Earnings from work and benefits giving entitlement to pension
Section 70
Pensionable earnings
When determining the pensionable earnings, the salary, performance-based bonus or other remuneration
that has been paid or has been agreed to be paid as compensation for work are taken into account. Such
remuneration is considered as earnings from work that accrues pension also when the employee receives
the payment not from the employer but from an estate in bankruptcy, an authority ensuring wage security
as referred to in the Wage Security Act (866/1998) or another payer (substitute payer).
Pensionable earnings also include remuneration to be paid for work that has been agreed to be either
wholly or partly compensated:
1) from service charges or donation funds available from the public, which are taken into account at the
same amount as in the last completed tax assessment, if no other reliable clarification of the amounts is
presented;
2) from the allowance paid by the contributory sickness fund, as referred to in the Insurance Funds Act,
which the employee receives in place of salary as provided by law or agreed upon in the collective
agreement or another agreement; or
3) from support for private care pursuant to the Act on Support for Home Care for Children and Private
Care (1128/1996), or from other similar support paid by the State or the municipality.
Remuneration for work referred to above in subsection 1 does not include the following:
1) a personnel benefit received from the employer;
2) interest benefit from a loan received on the basis of an employment relationship;
3) benefit from the right to subscribe to company shares at a lower price than the current price on the
basis of an employment relationship, if the said benefit is available to the majority of the personnel;
4) benefit arising from using an employment option as referred to in section 66 of the Income Tax Act
(1535/1992) or a payment based on an employment relationship that is determined on the basis of the
change in share value of the company;
5) a bonus given in the form of shares of the employer company or a company in the same Group or some
other similar financial consortium that are quoted on a stock exchange subject to supervisision by the
authorities, or as investment deposits or in another corresponding form; or instead of shares either partly
or wholly in cash, provided that the value of such a bonus is dependent on the development of the value
25
of the shares in question during a subsequent period of at least one year after which the bonus has been
promised;
6) an allowance received for a business trip or other cost reimbursement;
7) waiting period salary as referred to in Chapter 2, section 14(1) of the Employment Contracts Act;
8) compensation paid as the result of the employment contract ending or other damages;
9) profit bonus items, as referred to in the Act on Personnel Funds (814/1989), transferred to the
employee fund or taken out in cash or in fund units from the employee fund;
10) items paid to the employee as profit distribution or in cash as profit bonus based on a decision by the
General Meeting, provided that the profit bonus in cash is paid to the entire personnel and is not used as
an attempt to replace the payroll system required under the collective agreement or the employment
contract, and that the basis for determining the profit bonus in cash adhere to section 2(2) of the Act on
Personnel Funds and that the company’s amount of spare capital is larger than the total amount of profit
bonus in cash and dividends paid to the shareholders as decided by the General Meeting; and not
11) a profit share or dividend collected by a shareholder in the company.
In the situation referred to above in subsection 3, paragraph 10, it is also a requirement that no agreement
obligating the employer to pay a profit bonus has been made, that the owners reach a binding decision at
the General Meeting at the end of the financial year to pay a profit bonus in the form of cash, and that the
profit bonuses are paid thereafter. A further requirement is that the issue is processed according to the Act
on Co-operation within Undertakings (725/1978) or in another similar manner.
The employee receiving service charges from the general public shall report the taxable amount of service
charge to the employer.
The Act on Co-operation within Undertakings (334/2007) repeals the previous Act on Co-operation
within Undertakings.
Section 71
Allocation of earnings
Pensionable earnings are considered earnings for the calendar year during which they were paid (the
payment principle). If the consideration of earnings as earnings from the year of payment distorts the
pension amount, the earnings can be considered as earnings from the year during which they were earned.
Section 72
Pensionable earnings from work abroad (salary for insurance purposes)
If an employee is sent from Finland to work abroad or he or she is employed abroad within the scope of
application of this Act, the pensionable earnings shall be considered as the salary that would have been
paid for the corresponding work in Finland, in derogation to what is provided in section 70. If there is no
corresponding work in Finland, the earnings are considered to be the salary that would otherwise be
considered to correspond to the said work.
26
Section 73
Deducting an employee’s pension contribution from annual earnings
When determining the pensionable earnings from the earnings of each year, a sum corresponding to the
confirmed employee’s pension contribution for the said year, as referred to in section 153, is deducted.
Section 74
Unpaid periods giving entitlement to pension
Unpaid periods give entitlement to a pension if the employee has had insured earnings of at least EUR
12,566.70 under the earnings-related pension acts prior to the start of the pension contingency year.
Pension entitlement is calculated from the income constituting a benefit from an unpaid period,
calculated from the beginning of the calendar month following the employee’s 18th
birthday until the end
of the year immediately prior to the pension contingency. When calculating the old-age pension,
however, the income forming the basis of the employee’s benefit is taken into account until the end of the
old-age pension’s contingency month.
Income forming the basis of benefits during an unpaid period is considered earnings from the year for
which the benefit period is paid. Income forming the basis of benefits giving entitlement to pension are as
follows:
1) 117 per cent of the earnings pursuant to the Health Insurance Act that form the basis of maternity,
special maternity, paternity or parental allowance for the period during which the benefit has been paid to
the employee, and 17 per cent for the period during which the benefit has been paid to the employer;
2) 75 per cent of the earnings forming the basis of compensation for job alternation leave pursuant to the
Act on Job Alternation Leave;
3) 75 per cent of the earnings forming the basis of earnings-related allowance relative to earnings
pursuant to the Unemployment Security Act, insofar as the allowance has been received by the end of the
month during which the 63rd birthday occurred;
4) 65 per cent of the earnings forming the basis of earnings-related allowance pursuant to the Act on the
Public Employment Service;
5) 65 per cent of the earnings forming the basis of the training allowance referred to in Chapter 10 of the
Unemployment Security Act;
6) 65 per cent of the earnings forming the basis of adult training allowance pursuant to the Act on Adult
Training Allowance;
7) 65 per cent of the earnings forming the basis of rehabilitation allowance under the earnings-related
pension acts or the Act on the Social Insurance Institution’s Rehabilitation Benefits and Rehabilitation
Allowance Benefits, or compensation for loss of income granted on the basis of the provisions on
rehabilitation under workers’ compensation insurance or motor liability insurance, for the time period
during which the benefit has been paid to the employee, however not if the rehabilitation allowance has
been paid in addition to the pension;
27
8) 65 per cent of the the earnings, as referred to in the Health Insurance Act, that form the basis of
sickness allowance, partial sickness allowance and and special care allowance for the period during which
the benefit has been paid to the employee, however such that the income forming the basis of the partial
sickness allowance is half of the earnings on which sickness allowance is based; (1274/2006)
9) 65 per cent of the earnings forming the basis of loss of earnings compensation pursuant to the rules
governing accident, traffic or military injury insurance for the period during which the allowance has
been paid to the employee, however not insofar as pension accrues for the same reason as provided in
section 8.
If the benefit referred to in subsection 3, paragraph 1 has been paid as a minimum allowance due to a lack
of or small amount of earnings, the income forming the basis of the benefit is considered to be EUR
532.61 per month. If the benefit is the amount of the minimum allowance as a result of a return to work,
the income forming the basis of the benefit is considered to be the amount of the minimum allowance
paid to the employee.
Pension does not accrue on the income forming the basis of the benefit for periods during which the
employee has received pension in accordance with the earnings-related pension acts, a comparable benefit
from abroad or benefit on the basis of service in an international organization or an institution of the
European Community. However, pension also accrues from periods of part-time and survivors’ pension
on the basis of the income forming the basis of the benefit. (1164/2007)
Section 75
The employee’s pension record, issuing the record and checking the record
Every employee between the ages of 18 and 67 who resides in Finland will receive a pension record every
year detailing his or her pension-insured earnings. The pension record may be sent in writing or
electronically. The pension record lists the following information for the five years immediately preceding
the year during which the record is sent:
1) pensionable earnings pursuant to the private-sector earnings-related pension acts, per employer;
2) pensionable income on the basis of benefits paid during unpaid periods, per type of benefit;
3) the grounds and period for which pension accrues from state funds pursuant to the act governing
pension compensation for the care of a child under the age of three or for the duration of studies; and
4) the amount of pension accrued by the end of the year previous to the year of issuing the pension record.
Section 75 a
Issuing the pension record
A written pension record is sent to the employee by the pension provider with whom the employee’s
employment relationship has been insured at the end of the calendar year preceding the year during which
the pension record was sent, or by the pension provider he or she was last insured with prior to this
period.
The employee may receive an electronic pension record from the electronic customer service of the
pension provider with whom the employee’s employment relationship was insured at the time when the
electronic pension record is issued, or the pension provider he or she was last insured with prior to this
period.
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The pension record may be issued in electronic format if the employee has selected this option with the
electronic customer service of the pension provider. In order to select and check the electronic pension
record, the employee must log in to the electronic customer service of the pension provider. Data secure
and evidential identification technology is required for logging in.
The pension provider monitors that the employee who has opted for an electronic pension record uses the
electronic customer service containing the electronic pension record. If the employee does not sign in to
the service containing the electronic pension record within four calendar years, the pension provider with
whom the employee’s employment relationship was insured at the end of the four calendar years referred
to, or the pension provider he or she was last insured with prior to this period, shall send the employee a
written pension record during the following calendar year.
Section 75 b
Checking the pension record
If the employee finds deficiencies or errors in the information referred to in paragraphs 1–3 of section 75,
the pension provider issuing the pension record is obligated to clarify the correctness of the data at the
request of the employee. If necessary, the employee shall present a clarification of the grounds for the
request, such as can be reasonably expected. The pension provider is not obligated to clarify such
information retroactively for a period longer than five calendar years preceding the year during which the
pension record has been issued.
If the employee can indisputably demonstrate that he or she, prior to the aforementioned five years, had
pensionable earnings or benefits as referred to in paragraphs 1–3 of section 75 that have not been
correctly taken into account as giving entitlement to pension, the pension provider will take these
earnings or benefits into account retroactively. Indisputably demonstrated earnings are taken into account
as earnings of the payment year, and earnings forming the basis of benefits paid during unpaid periods as
well as during a period of caring for a child under the age of three and periods of study are taken into
account as earnings for those years during which the benefit period, childcare period or study period
occurred.
If the employee does not have insured earnings under the private-sector earnings-related pension acts, the
Finnish Centre for Pensions will send the the employee a pension record containing information on the
benefits referred to in paragraphs 2 and 3 of section 75 of this Act.
The employee may select and check the electronic pension record through the joint electronic customer
service of the earnings-related pension scheme by logging in to the service as provided in section 75(2).
The Finnish Centre for Pensions monitors that the employee selecting the electronic pension record uses
the electronic customer service that provides access to the pension record, and sends a written pension
record as provided in section 75 a(3). If necessary, the Finnish Centre for Pensions also reviews the
correctness of the data referred to in section 75, paragraphs 2 and 3, in the manner prescribed in
subsections 1 and 2.
The employee is entitled to receive a decision on the information affecting his or her pension right as
referred to in subsections 1 and 2. The decision is given by the pension provider issuing the pension
record, or, in situations referred to in subsection 3, by the Finnish Centre for Pensions. If the information
under subsections 1 and 2 is connected to an issue covered pursuant to section 10, which is under
consideration at the Finnish Centre for Pensions, the decision on this information is also given by the
Finnish Centre for Pensions.
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Projected pensionable service
Section 76
Earnings forming the basis of projected pensionable service
Earnings forming the basis of projected pensionable service (projected earnings) are determined on the
basis of earnings pursuant to the earnings-related pension acts and the income forming the basis of
benefits during unpaid periods, as provided under section 74, which the employee has received for the last
five calendar years preceding the year when disability began (reference period). Projected earnings also
include the projected earnings of the disability pension paid during the reference period and the earnings
reduction of a part-time pension. Projected earnings per month are the earnings that form the basis of
benefits during unpaid periods, the projected earnings of a disability pension, the earnings reduction of a
part-time pension received during the reference period and the sum of income referred to in subsection 4
divided by sixty. (1164/2007)
When determining projected earnings, the following is taken into account:
1) income forming the basis of maternity, special maternity, paternity and parental allowance to the
amount referred to in section 74(3), and
2) 100 per cent of other income forming the basis of benefits received during unpaid periods as referred to
in section 74.
If the benefit referred to in subsection 1 has been paid to the amount of the minimum allowance due to a
lack of earnings or small earnings, the sum taken into account when determining the projected earnings is
EUR 523.61 per month. If the benefit has been paid to the amount of a minimum allowance as a result of
a return to work, the minimum allowance paid to the employee will be taken into account when
determining the projected earnings.
When determining projected earnings, the income taken into account is EUR 1,047.22 for each full month
during which the employee has received payment during the reference period as:
1) basic allowance under the Unemployment Security Act, labour market support or training allowance to
the amount of the basic allowance, or
2) training allowance in the form of a basic allowance pursuant to the Act on the Public Employment
Service.
An allowance pursuant to the Health Insurance Act will be taken into account in the manner referred to in
subsection 4, if it has been granted to the amount of the basic allowance under the Unemployment
Security Act.
If the employee does not have pensionable earnings during the reference period, the pension component
for the projected pensionable service is not included in the pension and likewise income forming the basis
of benefits received during unpaid periods as referred to in section 74 or on the basis of income referred
to in subsection 4.
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Section 77
Impact of a period of child care on the projected pension
If the employee’s earnings are less than his or her established level of earnings during the reference period
referred to in section 76(1) due to caring for a child under the age of three, and if this circumstance has an
impact of at least 20 per cent on the amount of pension under the earnings-related pension acts, the
earnings which have not decreased due to a period of caring for a child may, on application by the
employee, be considered earnings as referred to in section 76(1). In this case, however, the earnings from
a maximum of the last ten years will be taken into account.
Section 78
Determining projected pension based on earnings of less than five years
If the employee has pensionable earnings, earnings forming the basis of benefits received during unpaid
periods, or projected earnings as referred to in section 76 only for the year during which the disability
began or the year previous to that year, the earnings of the year during which disability began until the
end of the month during which the employee has become disabled will be taken into account when
determining the projected earnings.
If the employee has become disabled prior to the end of the calendar year during which he or she turned
23 years of age, the reference period will run from the beginning of the month following the 18th
birthday
until the end of the month during which disability began. In this case, the projected earnings per month is
the sum of the projected earnings as referred to in section 76 that have been received during this reference
period divided by the number of months during that period, however by a maximum of 60.
Section 79
The share of earnings for projected pensionable service pursuant to this Act
If the projected pensionable service is taken into account in the employee’s pension on the basis of several
different earnings-related pension acts, the projected earnings under this Act are as large a share of the
total projected earnings as the share of earnings under this Act is of the total amount of earnings based on
the earnings-related pension acts during the reference period referred to in sections 76 and 78.
Other issues affecting the amount of disability pension
Section 80
Pension on previous grounds
If an employee receiving rehabilitation allowance pursuant to this Act is granted a disability pension on
the basis of a disability that has started before two years have elapsed since the end of the rehabilitation
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allowance period, the pension will be determined as it would have been had the disability started at the
beginning of the rehabilitation allowance period.
If an employee who has received a disability pension is later granted a disability pension on the basis of a
new disability that has started before two years have elapsed since the disability pension initially granted
has ended, the new disability pension is determined on the same grounds as the disability pension that
was granted initially. The same procedure is followed later if a new disability pension is granted to an
employee who previously received a disability pension for the same illness, handicap or injury.
If an employee receiving a disability pension is granted an old-age pension which begins before two years
have elapsed since the end of the disability pension, the old-age pension is determined on the same
grounds as the aforementioned disability pension.
Section 81
Lump sum increase for a disability pension
A lump sum increase is added to the employee’s disability pension from the start of the calendar year after
five calendar years have elapsed since the start of the pension. The increase is not added if the employee
has turned 55 at the start of the year during which the increase is given. The lump sum increase is not
added to the rehabilitation increment.
The lump sum increase is calculated on the basis of the joint amount of pensions under the private-sector
earnings-related pension acts that have been granted to the employee. The increase is determined
according to the employee’s age at the start of the year of the increase. The increase percentage is 21 if
the employee is aged between 24 and 26 at the start of the year of the increase. The increase percentage
decreases by 0.7 percentage points per year of age.
Life expectancy coefficient
Section 82
Adjusting pension provision to general changes in life expectancy
Pension provision is adjusted to changes in life expectancy so that the pension is converted by a
confirmed life expectancy coefficient for the year when the employee turns 62, to be implemented at the
start of the old-age pension.
When a disability pension is converted into an old-age pension at the age of 63, the pension is adjusted
using the confirmed life expectancy coefficient for the year in which the employee turned 62.
Section 83
Determining the life expectancy coefficient
The life expectancy coefficient referred to in section 82 is confirmed annually by a decree issued by the
Ministry of Social Affairs and Health, no later than one month before the start of the calendar year to
which it is applied. The life expectancy coefficient is determined so that the capital value of the converted
pension is the same when calculated on the basis of the mortality statistics of Statistics Finland, which are
always available for the last respective five years, as when calculating the capital value of the
unconverted pension in 2009 on the basis of the mortality statistics for the time period 2003–2007. An
interest rate of two per cent is used when calculating the capital value.
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Determining the survivors’ pension
Section 84
Grounds for the survivors’ pension
A survivors’ pension is granted on the death of the person through whom the benefit is derived on the
basis of an old-age pension or full disability pension pursuant to this Act. If the basis for a survivors’
pension is the old-age pension, it will be taken into account without being converted by the life
expectancy coefficient referred to in section 82. The pension which the deceased accrued while in
retirement is added to the pension of the deceased serving as the basis for the survivors’ pension.
If the deceased did not receive any pension as referred to in subsection 1 at the time of death, the pension
which the deceased would have received had he or she become disabled to the point of being entitled to a
full disability pension on the day of death is used as the basis for the survivors’ pension.
If the deceased was receiving a disability pension at the time of death, which did not include the lump
sum increase referred to in section 81, a lump sum increase will be added to the disability pension of the
deceased forming the basis for the survivors’ pension from the beginning of the year by which the
disability pension of the deceased and the survivors’ pension, on the basis of which it is granted, have
together been running for five calendar years. If the deceased was not receiving a pension at the time of
death, the lump sum increase will be added to the disability pension serving as the basis for the survivors’
pension from the beginning of the calendar year by which the survivors’ pension has been ongoing for
five calendar years. The lump sum percentage is determined in the manner referred to in section 81(2)
according to the age that the deceased would have been at the time of the increase.
Section 85
Amount of pension of the surviving spouse and former spouse
The amount of a surviving spouse’s pension is based on the survivors’ pension, unless otherwise provided
in subsection 2 or sections 88–93, and will be:
1) 6/12, if the benefactor is the surviving spouse or the surviving spouse and one child;
2) 5/12, if the benefactor is the surviving spouse and two children;
3) 3/12, if the benefactor is the surviving spouse and three children; and
4) 2/12, if the benefactor is the surviving spouse and four or more children.
The size of the surviving spouse’s pension of the former spouse of the deceased is determined so that its
share of the amount of surviving spouse’s pension calculated according to subsection 1 is the same as
what 60 per cent of the alimony paid by the deceased to the former spouse is of the pension of the
deceased as referred to in section 84. If the benefactors also include a surviving spouse, the combined
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amount of survivors’ pension of the former spouses will be a maximum of half of the survivors’ pension.
The total amount is deducted from the survivors’ pension and divided between the former spouses in
relation to the amounts of alimony.
Section 86
Amount of orphan’s pension
The amount of orphan’s pension is based on the survivors’ pension, unless otherwise provided in sections
92 or 93, and will be:
1) 4/12, if there is one child;
2) 7/12, if there are two children;
3) 9/12, if there are three children; and
4) 10/12, if there are four or more children.
The total amount of orphan’s pension is divided evenly between the children who are the benefactors.
Section 87
Adjusting the survivors’ pension
The amount of survivors’ pension and its distribution between the benefactors is adjusted whenever there
is a change in the number of benefactors. The adjustment is carried out from the beginning of the calendar
month following the change.
The amount of survivors’ pension is also reviewed when a lump sum increase is added to the disability
pension forming the basis of the survivors’ pension pursuant to section 83(3). The survivors’ pension is
then adjusted at the same time as the lump sum increase is added.//////
Section 88
Reducing the surviving spouse’s pension
The pensions received by the surviving spouse in accordance with the earnings-related pension acts and
similar acts reduce the surviving spouse’s pension. When reducing the surviving spouse’s pension, the
pensions received by the surviving spouse are taken into account without decreasing the primary benefits
referred to in sections 92 and 93, and the partial disability pension of the surviving spouse is taken into
account as a full disability pension. Furthermore, a benefit corresponding to the aforementioned pension,
which is paid or would have to be paid to the surviving spouse from abroad or on the basis of service for
an institution of the European Community or an international organization, is taken into account when
reducing the surviving spouse’s pension.
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If the surviving spouse does not receive any pension as referred to in subsection 1, the surviving spouse’s
earnings-related pension is still considered to be the notional pension that the surviving spouse would
have been granted had he or she become disabled in a manner giving entitlement to a full disability
pension on the day of death of the deceased (surviving spouse’s notional pension). If the surviving spouse
has worked abroad or in the service of an institution of the European Community or an international
organization, the surviving spouse’s earnings-related pension is considered to be the notional pension that
the surviving spouse would have been granted had the work that is included in the period of insurance
based on his or her service abroad or in an institution of the European Community or an international
organization been covered by this Act.
If the pension provider gives the amount of notional pension of the surviving spouse to a pension provider
which handles the implementation of the earnings-related pension acts of the public sector for the purpose
of determining the survivors’ pension pursuant to the earnings-related pension acts in the public sector,
the surviving spouse has the right to request a decision on the amount of notional pension from the
pension provider.
Section 89
Point in time for reducing the surviving spouse’s pension
The surviving spouse’s pension is reduced from the beginning of the seventh calendar month following
the death of the deceased. However, if the surviving spouse had turned 65 years of age at the death of the
deceased, or is receiving a pension as referred to in section 88(1), the survivors’ pension is reduced from
the beginning of the calendar month following the death of the deceased.
If, at the time of death of the deceased, a child or children were living in the same household as the
deceased and the surviving spouse who are entitled to receive an orphan’s pension on the death of the
deceased, the surviving spouse’s pension is not reduced until the youngest child has turned 18. The
notional pension of the surviving spouse is then considered to be the disability pension that he or she
would have been granted if he or she were to have become disabled to the extent giving entitlement to a
full disability pension following the 18th
birthday of the youngest child.
Section 90
Basis and amount of reduction in the surviving spouse’s pension
The surviving spouse’s pension is reduced if the earnings-related pensions of the surviving spouse as
referred to in section 88 exceed the grounds for a reduction in the pension. The reduction in the pension is
50 per cent of the difference between the earnings-related pensions referred to in section 88 and the basis
for the pension reduction. The basis for reducing the pension is:
1) EUR 649.69 per month, if the pension of the deceased calculated on the basis of section 84 together
with other earnings-related pensions exceed the stated cash amount;
2) the size of the total amount of the pension of the deceased calculated on the basis of section 84 and the
other earnings-related pensions, if the total amount of these earnings-related pensions exceeds EUR
324.77 and is a maximum of EUR 649.69;
3) EUR 324.77 if the earnings-related pensions listed in paragraph 1 amount to a maximum of EUR
324.77.
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When determining the basis for reducing the pension, benefits corresponding to earnings-related pensions
referred to in paragraphs 1 and 2 of subsection 1 and granted on the basis of service to the European
Community or an international organization are taken into account as provided in section 88(1) and 88(2).
If the surviving spouse has the right to receive a surviving spouse’s pension on the basis of another
earnings-related pension act in addition to this Act, an amount that is as large a share of the
abovementioned reduction as the surviving spouse’s pension pursuant to this Act is of all the surviving
spouse’s pensions based on the earnings-related pension acts will be deducted from the surviving spouse’s
pension based on this Act .
When reducing the surviving spouse’s pension, the surviving spouse’s pension is converted using the life
expectancy coefficient determined in section 82, confirmed for the year in question when the surviving
spouse’s pension is reduced.
Section 91
Reducing the surviving spouse’s pension in special circumstances
When reducing the surviving spouse’s pension, the average earnings of the surviving spouse and benefits
based on these as well as the partial disability pension or part-time pension are taken into account instead
of the earnings-related pensions at the request of the surviving spouse, if:
1) the surviving spouse does not receive an earnings-related pension based on his or her own work, or if
the surviving spouse receives a partial disability pension or part-time pension;
2) the surviving spouse has filed an application regarding the matter within five years of the death of the
deceased, or at the time when the surviving spouse’s pension is first reduced; and
3) the earnings referred to and the benefits based on these as well as the partial disability pension or parttime pension, if 60 per cent of the earnings are taken into account, amount to at least 25 per cent less than
the pension for a surviving spouse determined according to section 88. (1164/2007)
The average earnings referred to in subsection 1 are calculated from the earnings of the surviving spouse
for a six-month period prior to filing the application, and the reduction in the pension as per subsection 1
will be made from the beginning of this retroactive period at the earliest.
The surviving spouse’s pension is reviewed when such a change occurs that the preconditions referred to
in subsection 1 are no longer met. The surviving spouse’s pension is also adjusted when the surviving
spouse is granted a pension pursuant to the earnings-related pension acts of another type than the parttime pension.
The same basis for reducing the pension is used when adjusting the surviving spouse’s pension as was
used when reducing it the first time.
Chapter 5
Deducting primary benefits from the pension
Section 92
Benefits that reduce the pension
36
The primary benefit received by the employee is deducted from a pension based on this Act, and a
survivor’s pension or compensation that correspond to a primary benefit is deducted from a survivors’
pension. Primary benefits include:
1) a daily allowance or accident pension based on the provisions of the Employment Accidents Insurance
Act;
2) loss of earnings compensation or a pension based on a personal injury in accordance with the Traffic
Insurance Act;
3) loss of earnings compensation granted pursuant to the Act on Rehabilitation Compensated on the Basis
of the Employment Accidents Insurance Act;
4) loss of earnings compensation granted according to the Act on Rehabilitation Compensated on the
Basis of the Motor Liability Insurance Act;
5) annuity granted on the basis of the Military Injuries Act (404/1948) and;
6) an allowance or accident pension granted under the Compensation for Military Injuries Act.
If the employee is entitled to the benefit referred to in subsection 1, the pension payable as pension in
accordance with this Act is a share of the difference between the total amount of all earnings-related
pensions and the benefit referred to in subsection 1 equal to the share of the pension under this Act of all
the earnings-related pensions.
Section 93
Reduction in a benefit received from abroad
The benefit paid by another State that corresponds to the benefit referred to in section 92(1) is also
considered to be a primary benefit.
If, when determining the employee’s pension, the projected pensionable service is taken into account
pursuant to the pension legislation of two or more EU or EEA countries, or countries that have a social
security agreement, overlapping projected pensionable service is prevented so that the projected
pensionable service is granted on the basis of the Act such that the insurance period pursuant to the
employee’s earnings-related pension acts is in proportion to the to the insurance periods of all countries
granting projected pensionable service.
Section 94
The impact of a change in the primary benefit on the amount of pension
If the pension recipient is granted a primary benefit or if the amount of the primary benefit or pension
pursuant to this Act changes for other reasons than an index adjustment, the amount of pension is
adjusted. The amount of pension is also adjusted if a primary benefit has been deducted from a pension
pursuant to this Act, and the pension recipient has been granted another earnings-related pension.
However, an allowance or loss of earnings compensation on the basis of the Employment Accidents
Insurance Act, the Traffic Insurance Act or the Compensation for Military Injuries Act is not deducted
from the partial disability pension if it is granted on the basis of an accident or traffic injury occurring
during a period of partial disability pension.
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The amount of survivors’ pension is adjusted if the pension recipient is granted a survivors’ pension
corresponding to a primary benefit or a survivors’ pension pursuant to the earnings-related pension acts,
and a primary benefit has been deducted from this lawful survivors’ pension.
The pension is adjusted from the time that the benefit referred to in subsection 1 is granted or from which
the amount of the benefit or the pension pursuant to this Act changes. If the pension recipient is granted a
benefit from abroad in accordance with section 93(1), or the amount of the benefit changes, the pension
amount is adjusted from the beginning of the following calendar month during which the pension
provider is informed about the granting or changing of this kind of benefit.
The amount of pension is not adjusted if the primary benefit is granted or its amount changes for a
maximum period of four months calculated from the start of the benefit or the changes made to it.
Section 95
Right of recourse
Pension pursuant to this Act can be paid at an unreduced level until the amount of the primary benefit has
been finally clarified. The right of the pension recipient to a primary benefit is transferred to the pension
provider insofar as the benefit would have reduced the pension.
Chapter 6
Consideration of changes in salary and price levels
Section 96
Adjusting earnings limits, money amounts and annual earnings by the wage coefficient
The earnings limits, money amounts and lower and upper limits are adjusted annually from the beginning
of January by a coefficient (wage coefficient) where the weighting coefficient of changes in the wage
level is 0.8 and the weighting coefficient of changes in the price level is 0.2.
When calculating the pension, annual earnings are adjusted by the wage coefficient to the level of the
year when the pension starts.
The earnings limits, money amounts and upper and lower limits of this Act correspond to the value of the
wage coefficient, as referred to in subsection 1, of one (1.000) in 2004.
Section 97
Determining the wage coefficient
The basis for the wage coefficient is the annual changes in the earnings level and consumer price index
calculated by Statistics Finland in the third quarter of the previous calendar year. When determining the
wage coefficient, a sum corresponding to the change in the employee’s earnings-related pension
contribution at the beginning of the previous calendar year, as referred to in the first sentence of section
153, is deducted from the change in the wage level.
Section 98
Pension index adjustment
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The pension being received is adjusted annually at the beginning of January using an index (the earningsrelated pension index), in the calculation of which the weighting coefficient for changes in the wage level
is 0.2 and the coefficient of changes in the price level is 0.8.
Section 99
Determining the earnings-related pension index
The basis for the earnings-related pension index is the annual changes in the earnings level and consumer
price index calculated by Statistics Finland in the third quarter of the previous calendar year. When
determining the index, a sum corresponding to the change in the employee’s earnings-related pension
contribution at the beginning of the previous calendar year, as referred to in the first sentence of section
153, is deducted from the change in wage level.
Section 100
Issuing the wage coefficient and earnings-related pension index
The Ministry of Social Affairs and Health issues the wage coefficient and earnings-related pension index
for each calendar year by decree at least two months before the start of the calendar year to which they
are applied.
Chapter 7
Applying for a pension and pension decisions
Section 101
Pension application
The pension shall be applied for from the pension provider using the form that has been confirmed by the
Finnish Centre for Pensions. All the necessary clarifications shall be appended to the application for the
purpose of deciding the pension matter.
More detailed provisions on the forms and certificates needed in order to apply for a pension are provided
by Government decree.
Section 102
Report on the health of the applicant for a disability pension
The applicant for a disability pension shall supply the pension provider with a doctor’s certificate on his
or her health, containing a treatment or rehabilitation plan. The pension provider may, however, approve
another type of doctor’s certificate or corresponding report. The pension provider may, at its own
expense, also obtain a doctor’s certificate if the applicant is being treated at a hospital or there is another
special reason thereto.
The applicant for a disability pension is obligated, at the request of the pension provider, to undergo a
medical examination by a certified doctor appointed by the pension provider or to go to a rehabilitation or
research facility appointed by the pension provider, in order that the deterioration in working capacity can
be investigated. If the applicant refuses the examination without an acceptable reason, the pension
application may be decided on the basis of the information already available to the pension provider.
39
The pension provider is obligated to reimburse the applicant for a disability pension of any costs arising
from the examination referred to in subsection 2, as well as reasonable costs arising from any travel.
Section 103
Pension application on behalf of the employee
If the employee is unable to apply for a pension or otherwise process pension-related issues due to the
person’s age, an injury, illness or another reason, and he or she does not have a trustee, a close relative of
the employee or person caring for the employee that has been approved by the pension provider may
apply for the pension on behalf of the employee as well as otherwise use the right of action on the
employee’s behalf in issues concerning a pension pursuant to this Act.
Section 104
Beginning of lis pendens of the pension application
The pension application is considered to have been filed on the day on which it has arrived at the pension
provider referred to in the acts mentioned in section 3 or to the Finnish Centre for Pensions or an agent
authorized for that purpose by the pension provider or the Finnish Centre for Pensions.
Section 105
The decision and its service
The right to a pension pursuant to this Act and the amount of pension are decided by a decision issued by
the pension provider. The competent pension provider shall decide on the pension application without
delay, once it has received the necessary clarifications.
The pension provider and the Finnish Centre for Pensions serve their decision by sending a letter to the
pension recipient at the address he or she has provided.
More detailed provisions on the electronic signature of the pension provider’s and the Finnish Centre for
Pensions’ decision are issued by Government decree.
Section 106
Work carried out only in fields covered by private-sector earnings-related pension acts
The employee’s pension application is processed and decided by the pension provider with whom the
employee’s pension provision was arranged at the time of the pension contingency, or just before the
pension contingency. This pension provider (private-sector pension provider) pays pension pursuant to
the pension acts of other private sectors, and manages the other tasks of a pension provider relating to
pensions. Additionally, this pension provider decides on pension accrued on the basis of unpaid periods as
mentioned in section 74 as well as on the accrued benefit of pension compensation from state funds in
accordance with the act on compensating pension for the duration of time spent caring for a child under
the age of three or for periods of study.
If projected pensionable service is taken into account when determining the pension, the tasks referred to
in subsection 1 are handled by the pension provider with whom the employee’s pension provision was
arranged at the end of the calendar year prior to the pension contingency year, or the pension provider he
or she was last insured with prior to this period.
40
Section 107
Work in fields covered by both private and public-sector earnings-related pension acts
If the employee has been covered by pension provision based on the earnings-related pension acts of the
private sector as well as pension provision referred to in section 3(2)(1–3 and 5), and if he or she had
pension provision arranged with a private-sector pension provider at the time of the pension contingency
or the last time before,the pension contingency, this pension provider (last pension provider):
1) gives a summary of its own decision based on section 106 and of the decisions of the pension
providers managing the pension provision and corresponding survivors’ pension provision pursuant to the
aforementioned public-sector earnings-related pension acts (public-sector pension provider), and
2) pays the pension according to the summary of the decisions and manages the other tasks relating to
pensions.
If the pension provision of the employee at the time of the pension contingency or the last time before the
pension contingency was arranged with a public-sector pension provider, this provider will, as the last
pension provider, manage the tasks referred to in section 1 also regarding pension provision pursuant to
the private-sector pension acts.
If the projected pensionable service is taken into account when determining the pension, the tasks referred
to in subsection 1 are managed by the private or public-sector pension provider with whom the
employee’s pension provision was arranged at the end of the calendar year prior to the pension
contingency year, or the pension provider he or she was last insured with prior to this period.
The provisions of subsections 1, 2 and 3 on the last pension provider are not applied to disability pensions
if the employee’s pension provision has been arranged with a public-sector pension provider at the end of
the calendar year preceding the pension contingency year, or the last time before this, and if the employee
has earnings pursuant to this Act and the Seamen’s Pensions Act totalling at least EUR 12,566.70 during
the two years preceding the pension contingency year. The provisions of subsections 1, 2 and 3 on the last
pension provider are also not applied to disability pensions if the employee is in ongoing public-sector
employment that began during the pension contingency year and his or her pension provision had been
arranged with a private-sector pension provider at the end of the calendar year prior to the pension
contingency year or the last time before this. (1274/2006)
If a part-time pension is granted simultaneously in accordance with both the private and the public-sector
pension acts, the pension is granted separately by the private-sector pension provider and the publicsector pension provider.
Section 108
Obligation to negotiate
Prior to its decision, the public-sector pension provider functioning as the last pension provider must
request an evaluation of the employee’s working capacity from the private-sector pension provider if the
pension from the private-sector pension provider exceeds EUR 688.02 per month, and the public-sector
pension provider, as the last pension provider, determines the employee’s entitlement to disability pension
pursuant to:.
1) section 35(1)(1) of the State Employees’ Pensions Act; (1274/2006)
2) section 24(1)(1) of the Local Government Pensions Act;
41
3) the provisions of the Evangelical Lutheran Church Pension Act that correspond to the provisions of
paragraph 1 above, or
4) the provisions of section 13 of the Act on the Social Insurance Institution of Finland that correspond to
provisions of paragraph 1 above.
If the private-sector pension provider and the last pension provider disagree on the evaluation of the
employee’s working capacity, they will settle the pension matter separately.
Section 109
The pension provider paying the pension as the last pension provider
The public or private-sector pension provider paying an old-age, disability or part-time pension to the
pension recipient is considered the last pension provider also when the pension recipient is granted an
old-age pension. The pension provider paying a disability pension is considered the last pension provider
also when the pension recipient is granted a new disability pension, unless otherwise provided in section
107(4). The same pension provider that insured the part-time work handles the issues relating to a
disability pension to be granted after a part-time pension, as provided in greater detail in sections 106 and
107. (1274/2006)
If the part-time work of an employee receiving a part-time pension from a private-sector pension provider
has been insured with another private-sector pension provider than the one that pays, the disability
pension matter is handled by the pension provider with whom the part-time work is insured.
Section 110
Possibility for agreement
The pension providers may agree that the arrangements of the last pension provider are complied with
also in the situations referred to in section 107(4) and 107(5) or in other instances where it would not need
to be followed pursuant to the provisions of the law. In such cases, the pension applicant shall be
informed of the pension provider handling his or her pension matter.
Section 111
The power of decision of the Finnish Centre for Pensions and detailed provisions
If it is unclear which pension provider is authorized to handle the pension application, the Finnish Centre
for Pensions will settle the matter at the request of the pension provider. The decision of the Finnish
Centre for Pensions in this matter cannot be appealed.
If the employee has not had any work under the earnings-related pension acts, the pension application will
be decided by the Finnish Centre for Pensions.
More detailed provisions on determining the competent pension provider are issued by Government
decree.
Chapter 8
Pension payment, increase for delay and recovery
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Section 112
Payment of the pension
The pension is paid to the pension recipient, unless otherwise provided in this Chapter or in other acts.
The pension is paid monthly such that it may be withdrawn from the account in a financial institution
operating in Finland that was notified by the pension recipient on the due date stated in the pension
decision. The pension may also be paid to the pension recipient’s account abroad.
Section 113
Start, termination, suspension and discontinuation of the payment
The payment of the pension starts from the beginning of the calendar month following the
commencement of pension entitlement, unless otherwise provided in the provisions of Chapter 3. The
pension is paid to the end of the calendar month during which the entitlement to the pension ceases.
If the pension provider has reason to suspect that the pension recipient no longer meets the entitlement
criteria for the pension, the pension provider may suspend the payment of the pension. The precondition
is that the pension provider has requested clarification from the pension recipient of the factors relating to
the amount of pension or pension entitlement, but the pension recipient has not presented clarification
within a reasonable time limit, as notified by the pension provider.
If information on the pension recipient’s death cannot be presented but it is probable that the pension
recipient has died by drowning, through some other accident or for some other similar reason, the pension
provider may discontinue the pension as of the date when the pension recipient goes missing.
Section 114
The pension as a lump sum
If the old-age pension, survivors’ pension or full disability pension before the deduction of primary
benefits referred to in sections 92–94 amounts to less than EUR 20 per month, the pension provider may
pay the pension as a lump sum.
If the pension referred to in subsection 1 amounts to at least EUR 20 per month but a maximum of EUR
50, the pension provider may pay the pension as a lump sum if the pension recipient has been informed of
the payment of the pension as a lump sum and the pension recipient has not objected to this within a
reasonable time period, as informed by the pension provider.
The payment as a lump sum of a disability pension awarded until further notice also includes the old-age
pension awarded after a disability pension.
If the disability pension is paid as a lump sum, no retroactive pension payments are made to the Sickness
Insurance Fund.
When the pension is paid according to the principle of the last pension provider on the basis of the
summary of decisions referred to in section 107, the amount of pension referred to in subsections 1 and 2
means the total amount of the pensions included in the summary of the decisions.
The Ministry of Social Affairs and Health issues the coefficients for lump sum payments by decree, and
these coefficients shall be determined on actuarial grounds.
43
Section 115
Increase for delay
If the payment of a pension awarded under this Act is delayed, the pension provider shall pay the delayed
pension increased with an increase for the period of delay. The increase to the pension, calculated per
year, is pursuant to the interest rate referred to in section 4(1) of the Interest Rate Act (633/1982) . The
obligation to pay the pension with an increase also covers pensions which the pension provider pays as
the last pension provider under section 107.
The obligation to pay the pension with an increase pursuant to subsection 1 does not cover the part of the
pension which is paid to another insurance or pension provider engaged in statutory insurance or to the
Social Insurance Institution of Finland or to an unemployment fund due to the claim for recourse of the
institution in question.
An increase for delay is not paid if its amount is less than EUR 5.39.
Section 116
Period for which the increase for delay is calculated
The increase to the pension shall be calculated for each day of the period of delay, however not before
three months have elapsed from the end of the calendar month during which the employee presented his
claim to the pension provider, together with clarification for the grounds of the pension which can
reasonably be required of the employee, also taking into account the pension provider’s possibilities of
obtaining clarification. The increase for delay shall be calculated from the due date for a pension payment
payable at a later date on the basis of the same decision.
If the payment of the pension is delayed for a reason dependent on the pension recipient, the pension
provider is not obligated to pay the pension with an increase for a longer period than from the date when
the pension provider became aware of the cessation of the obstacle.
If the payment of the pension is delayed due to a provision of law or an interruption in the payment traffic
or some other similar general obstacle, the pension provider is not obligated to pay the pension with an
increase for the period of delay caused by such an obstacle.
Section 117
Payment of the pension and rehabilitation benefit to the employer or the contributory sickness fund
If the pension provider has retroactively awarded the employee a disability pension and if the employer
has paid the employee sick pay for the same period, the pension is paid, on application, to the employer
for this period for a maximum amount of the wage paid for the same period. The supplementary daily
allowance paid by a contributory sickness fund as referred to in the Insurance Funds Act corresponds to
the wage paid by the employer, and the pension is, on application, paid to the contributory sickness fund
in the same manner as to the employer.
If the employee has been awarded an old-age pension instead of a disability pension in the manner
referred to in section 52(3), retroactively from the beginning of the month following the person’s 63rd
birthday and if the employer has paid the employee sick pay for the same period, the pension is paid, on
application, to the employer for the period of disability to a maximum of the same amount as the wage
paid for the same period.
44
If the pension provider has retroactively awarded the employee a disability pension, or in a situation
referred to in subsection 2 an old-age pension, and if the employer has paid the employee notice period
pay instead of sick pay for the same period, the pension is paid for this period, on application, to the
employer to a maximum amount of the wage paid for the same period.
If the employer pays the employee wages for the same period for which the employee receives a
rehabilitation allowance or a disability pension and a rehabilitation increment related to this, the
rehabilitation allowance or the disability pension with the rehabilitation increment are paid for this period,
on application, to the employer to a maximum amount of the wage paid for the same period.
The pension, rehabilitation allowance or rehabilitation increment is not paid to the employer or the
contributory sickness fund, insofar as it shall be paid to the Sickness Insurance Fund pursuant to section
118, and also when the employer or the contributory sickness fund has received compensation for the paid
wage in accordance with some other act.
Section 118 (1274/2006)
Payment of the pension and the rehabilitation benefit to the Sickness Insurance Fund
If the employee has been paid a daily allowance or partial sickness allowance under the Health Insurance
Act for the same period for which the employee is granted an old-age pension, the old-age pension is paid
to the Sickness Insurance Fund, insofar as the pension amount corresponds to the sickness allowance or
partial sickness allowance paid for the same period.
If the full disability pension is awarded retroactively after the period of sickness allowance preceding the
disability pension as referred to in section 41(1), and if daily allowance or partial sickness allowance
under the Health Insurance Act has been paid for the same period, the disability pension is paid to the
Sickness Insurance Fund insofar as the pension amount corresponds to the daily allowance or partial
sickness allowance under the Health Insurance Act paid for the same period.
If a rehabilitation allowance or rehabilitation increment is awarded retroactively for the same period for
which the employee has been paid a daily allowance or partial sickness allowance under the Health
Insurance Act, the rehabilitation allowance and rehabilitation increment are paid to the Sickness Insurance
Fund insofar as the amount corresponds to the daily allowance or partial sickness allowance under the
Health Insurance Act paid for the same period.
Section 119
Payment of the pension to a municipality or an institution under the Social Welfare Act
If the employee has received income support as referred to in section 23 of the Income Support Act
(1412/1997) as an advance payment, the pension provider shall pay the pension granted retroactively for
the same period, or part of it, in order to compensate for the income support already paid to the institution
referred to in section 6(1) of the Social Welfare Act on the request of the institution.
If a municipality or federation of municipalities has arranged institutional care or family care for the
person entitled to a pension, the pension provider shall, on the request of the municipality or federation of
municipalities, pay the pension for the period of institutional care or family care to the municipality or
federation of municipalities to use in the manner referred to in section 14 of the Act on Client Charges in
Social and Health Care (734/1992).
Section 120
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Payment of the pension to the Social Insurance Institution of Finland or an unemployment fund
If the employee has temporarily received a pension paid by the Social Insurance Institution under section
72 of the National Pensions Act or the aforementioned pension and housing allowance under section 8 of
the Act on Housing Allowance for Pensioners (571/2007) for the same period for which the employee is
retroactively granted a pension under this Act on the basis of an appeal, the pension provider shall, on the
Social Insurance Institution’s request, pay the retroactive pension amount to the Social Insurance
Institution insofar as the amount corresponds to the amount of the excess benefit paid by the Social
Insurance Institution for the same period. (1164/2007)
The pension provider may pay the pension it granted retroactively to the Social Insurance Institution of
Finland in the manner provided in subsection 1 also when the pension provider:
1) continues the payment of the cash rehabilitation benefit awarded pursuant to an appeal;
2) grants the beneficiary a survivors’ pension under this Act;
3) corrects its previous decision in accordance with section 139;
4) otherwise adjusts the amount of the awarded pension, or
5) after a corrected decision grants a continuation of the cash rehabilitation benefit.
However, the pension is not paid to the Social Insurance Institution of Finland as compensation for
housing allowance that the Social Insurance Institution has paid in excess, unless a retroactive pension
payment is made at the same time as compensation for the pension that the Social Insurance Institution
has paid in excess.
If the employee has received unemployment allowance, labour market support or a daily training
allowance under the Unemployment Security Act or training allowance under the Act on the Public
Employment Service for the period for which he or she is awarded a pension retroactively, the pension
provider shall, on the request of the unemployment fund or the Social Insurance Institution of Finland,
pay the pension to be paid retroactively to the unemployment fund or the Social Insurance Institution
insofar as the pension amount corresponds to the unemployment allowance, labour market support,
training allowance or the daily training allowance paid for the same period.
If the employee has received a study grant, adult education subsidy or housing supplement under the Act
on Student Financial Aid (65/1994) for the same period for which he or she is retroactively granted some
other pension than a partial disability pension, the pension provider shall, on the request of the Social
Insurance Institution, pay the pension paid retroactively to the Social Insurance Institution insofar as the
amount corresponds to the student financial aid paid for the same period.
Section 121
Time limit for the presentation of payment claims
In cases referred to in sections 117–120, the pension is paid to the Sickness Insurance Fund, the employer,
the contributory sickness fund, the municipality, the federation of municipalities, the social welfare
institution, the Social Insurance Institution of Finland or the unemployment fund only provided that the
claim for payment of the pension has been presented to the pension provider at least two weeks before the
date of payment.
Section 122
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Payment of the pension to an institution under the Social Welfare Act by consent
The pension provider may, with the consent of the pension recipient, decide that the pension under this
Act is paid to the institution referred to in section 6(1) of the Social Welfare Act in the pension recipient’s
municipality of residence so that the pension is used for the welfare of the pension recipient and any such
person which the pension recipient is obligated to provide for under section 2 of the Income Support Act.
The precondition is that the payment of the pension to the pension recipient himself/herself cannot be
considered appropriate due to the person’s way of life, illness or other special reasons and that the pension
recipient has not been assigned a person to represent his interests.
The proposal to pay the pension to the institution referred to in the Social Welfare Act may be made by
the pension recipient, the spouse of the pension recipient, other relatives or the person who mainly cares
for the pension recipient, or the relevant municipal institution.
The pension shall not be used for purposes other than for the provision of welfare during the month for
which the pension has been paid, without the consent of the pension recipient.
Section 123
Order of payment of the pension
If the pension is to be paid to some party other than the pension recipient himself/herself under this Act or
some other act, and two or more authorities, municipalities, institutions or organs or other parties have a
claim on the pension, the pension is paid in the following order of precedence:
1) to the Sickness Insurance Fund under section 118; (1274/2006)
2) to the pension provider under section 120(1) of the Self-Employed Persons’ Pensions Act or to the
Farmers’ Social Insurance Institution under section 28 of the Farmers’ Pensions Act as unpaid
contributions; (1274/2006)
3) to the pension provider as recovery of a pension which has been paid without due cause, pursuant to
section 126; (1274/2006)
4) to the employer or the contributory sickness fund under section 117; (1274/2006)
5) to the unemployment fund or the Social Insurance Institution under section 120(4) ; (1274/2006)
6) to the Social Insurance Institution under section 120(1) and 120(2); (1274/2006)
7) to the institution as referred to in the Social Welfare Act under section 119(1); (1274/2006)
8) to the municipality or federation of municipalities under section 119(2); (1274/2006)
9) to the Social Insurance Institution under section 120(5); (1274/2006)
10) to the Finnish Patient Insurance Centre under section 9 of the Treatment Injuries Act (585/1986);
11) to the provider of the EU or EEA country and Switzerland, the unwarranted payment of pension under
Article 111(1) of Council Regulation (EEC) No 574/72 on the implementation of the EC Regulation on
social security;
47
12) to the enforcement authority under Chapter 4, section 2 of the Enforcement Code (705/2007);
(1097/2008)
13) to the provider of the EU or EEA country and Switzerland, the unwarranted payment of a benefit
other than pension under Article 111(2) and 111(3) of Council Regulation (EEC) No 574/72 on the
implementation of the EC Regulation on social security;
14) to the institution of the countries party to a social security agreement pursuant to the agreements, the
unwarranted payment of pension or other benefit in accordance with the provisions of the social security
agreement; and
15) to the institution referred to in the Social Welfare Act under section 122;
The Enforcement Act has been repealed through the Enforcement Code 705/2007, see Chapter 4, section
2 of the Enforcement Code 705/2007.
Section 124
Transfer or pledging of the pension
The pension shall not be transferred to another person. Any agreement that refers to pledging the pension
is void.
Reimbursements of costs under this Act are not destrainable.
Section 125
Statute-barring of the pension
The pension entitlement becomes statute-barred in five years from the date when the pension should have
been paid, unless the limitation period has been interrupted before that. A new limitation period of five
years starts from the interruption of the limitation period. The statute-barring is interrupted as provided in
section 10 or 11 of the Act on Limitations for Debts (728/2003). The limitation period may be extended as
provided in section 11(3) of the Act on Limitations for Debts.
Section 126
Recovery of unduly paid pension
If the pension has been paid to a greater amount than that to which the recipient is entitled, the pension
provider shall recover the unduly paid pension.
The pension provider may waive the recovery of the unduly paid pension, either fully or in part, if this is
considered reasonable and if the payment of the pension has not been due to the deceitful behaviour of the
pension recipient or his or her representative. The pension provider may also waive the recovery of the
unduly paid pension if the amount to be recovered is small.
The provisions of subsections 1 and 2 shall also apply when the pension provider has, when acting as the
private-sector pension provider or as the last pension provider as referred to in section 107, paid the
pension under the private-sector pension acts without due cause. If the last pension provider has paid the
pension under the public-sector pension acts without due cause, recovery is decided on by the relevant
public-sector pension provider as provided in the relevant act. The last pension provider issues a summary
of the decisions regarding the pensions to be recovered and recovers the amount to be recovered.
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The decision on the recovery of the unduly paid pension shall be made within five years of the date of
payment of the pension. The receivables confirmed through the decision on the recovery fall under the
statute of limitations within five years of issuing the decision, unless the limitation period has been
interrupted before that. The limitation period of the receivables confirmed through the recovery decision
is interrupted as provided in section 10 or 11 of the Act on Limitations for Debts. A new limitation period
of five years starts from the interruption of the limitation period. The limitation period may be extended
as provided under section 11(3) of the Act on Limitations for Debts.
Section 127
Set-off of unduly paid pension
The pension provider may also recover the pension it has paid without due cause by setting it off against
future pension payments. A maximum of one-sixth of the share of the pension payment which remains
after tax withholding pursuant to the Act on the Prepayment of Tax (1118/1996) has been applied to the
pension payment may be deducted from the pension payment payable without the pension recipient’s
consent. (1274/2006)
If the last pension provider referred to in section 107 recovers the amount to be recovered through a setoff, the pension payment referred to in subsection 1 is considered to be the total amount of the pension
payments payable by the last pension provider.
Chapter 9
Appeal
Section 128
Appealing
Appeals can be made through the Pension Appeal Court and the Insurance Court. Provisions on the
Pension Appeal Court and its members are given in the Act on the Pension Appeal Court (677/2005) and
provisions on the Insurance Court in the Act on the Insurance Court (132/2003). The Government
appoints the members to the Pension Appeal Court for a maximum period of five years at a time on a
proposal of the Ministry of Social Affairs and Health. The members are familiar with the employment and
labour market conditions, and at least four of whom shall be nominated on the proposal of the most
representative central organisations of the employer organisations and at least four on the proposal of the
most representative central organisations of the blue-collar and white-collar workers’ trade unions.
The party involved may appeal against a decision given under this Act by a pension provider or the
Finnish Centre for Pensions to the Pension Appeal Court as provided in this Act and in the Administrative
Judicial Procedure Act (586/1996).
The party involved may appeal against the decision given in an appeal by the Pension Appeal Court to the
Insurance Court as provided in this Act and in the Administrative Judicial Procedure Act.
The decision of the Finnish Centre for Pensions concerning the pension provider competent to process the
pension claim as referred to in section 111(1) cannot be appealed.
Section 129
Appealing against the summary of decisions of the last pension provider and the summarised statement on
EU decisions
49
The summary of decisions issued by the pension provider acting as the last pension provider as referred to
in section 107 is governed by the provisions on decisions in this Chapter. If the pension provider’s
decision is included in a summary of decisions issued by a public-sector pension provider acting as the
last pension provider, as referred to in section 107(2), the decision may be appealed and the appeal is
heard as provided in the public-sector pension acts.
A party who has been insured in two or more EU countries and who is dissatisfied with the decision
issued by the pension provider pursuant to this Act may appeal the decision after having received the
summarised statement containing the decisions of all the EU countries as referred to in Article 48 of
Council Regulation (EEC) No 574/72 on the implementation of the EC Regulation on social security.
However, the pension provider’s decision on the entitlement criteria for the disability pension is appealed
as provided in this Act.
Section 130
Period for appeal
The period for appeal is 30 days from the date when the party involved was served the decision of the
pension provider, the Finnish Centre for Pensions or the Pension Appeal Court. The party involved is
considered to have been served the decision on the seventh day after the date when the decision was
mailed to the address stated by the party involved, unless proven otherwise in connection with the appeal.
Section 131
Material appeal concerning debiting
The party involved may lodge a material appeal concerning the debiting if the party finds that the debiting
imposed under this Act by the pension provider or the Finnish Centre for Pensions, or the employer’s
withholding of the employee’s pension contribution under section 152 or section 154, has been contrary
to law or to the agreement. The material appeal shall be made in writing and it shall be filed with the
Pension Appeal Court at the latest within two years from the beginning of the year following the year
during which the receivables were imposed or debited.
If a material appeal is lodged as a result of distraint, the provisions on the material appeal in the Act on
the Implementation of Taxes and Charges (706/2007) shall also be applied. (1164/2007)
Section 132
Submitting the petition of appeal
The party involved shall submit the petition of appeal within the period for appeal to the pension provider
that made the decision subject to appeal. If a decision of the Finnish Centre for Pensions is being
appealed, the petition of appeal shall be submitted to the Finnish Centre for Pensions. The petition of
appeal concerning a decision made by the Pension Appeal Court shall be submitted to the pension
provider that made the decision in the matter or to the Finnish Centre for Pensions.
Section 133
Correction of the decision in connection with appeals
The pension provider that issued the decision subject to appeal or the Finnish Centre for Pensions
investigates whether it can itself correct the decision. If the pension provider or the Finnish Centre for
50
Pensions accepts the claims stated in the petition of appeal in every respect, it shall give a corrected
decision in the matter. The corrected decision may be appealed as provided in this Chapter.
The pension provider that has given the summary of decisions as the last pension provider shall ask the
public-sector pension provider for a statement before the matter is processed, insofar as the appeal
concerns pension provision handled by the public-sector pension provider. No statement is requested,
however, if the appeal solely concerns the assessment of work ability.
If all the pension providers whose decisions the appeal concerns accept the appellant’s claims, the last
pension provider gives a new, corrected summary of decisions. The last pension provider gives a new,
corrected summary of decisions also when the appeal regarding the summary of decisions only concerns
the assessment of work ability and the private-sector pension provider as the last pension provider accepts
the claims stated in the appeal submitted to it. A summary of decisions corrected in this manner may be
appealed as provided in this Chapter.
If the pension provider, the last pension provider or the Finnish Centre for Pensions corrects its previous
decision only in part, it shall give an interim decision on the matter. The interim decision cannot be
appealed.
Section 134
Transfer of appeals to the appellate body
If the pension provider or the Finnish Centre for Pensions does not accept the appellant’s claims in every
respect, it shall forward the petition of appeal as well as its statement on the appeal within 30 days of the
end of the period for appeal to the Pension Appeal Court. If the appeal concerns a decision of the Pension
Appeal Court, the pension provider or the Finnish Centre for Pensions shall submit the petition of appeal
and its statement to the Insurance Court within the time period mentioned.
If the pension provider or the Finnish Centre for Pensions accepts the claims stated in the appeal, either
fully or in part, after the petition of appeal has been submitted to the appellate body, the pension provider
or the Finnish Centre for Pensions may give an interim decision on the matter. The appellate body shall be
informed about the interim decision without delay. The interim decision cannot be appealed.
The pension provider or the Finnish Centre for Pensions may deviate from the time limit stated in
subsection 1 if obtaining further clarification necessary for processing the appeal so requires. In this case,
the appellant shall be informed about the obtaining of further clarification without delay. However, the
petition of appeal and the statement shall be submitted to the relevant appellate body at the latest within
60 days of the end of the period for appeal.
If the pension provider that, as the last pension provider, has requested the statement referred to in section
133(2), from a public-sector pension provider and it does not correct its decision in line with the claims of
the appellant, the pension provider shall submit the petition of appeal and the statements concerning the
petition to the appellate body referred to in subsection 1 within 60 days of the end of the period for
appeal.
Section 135
Appeals which arrive after the period for appeal
If the appeal to the Pension Appeal Court or the Insurance Court arrives at the relevant pension provider
or the Finnish Centre for Pensions or the Pension Appeal Court or the Insurance Court after the time limit
51
referred to in section 130 and section 131, the appeal may nevertheless be taken up for consideration, if
there is a weighty reason for the delay.
Section 136
Enforcement of the decision
The decision of the pension provider or of the Finnish Centre for Pensions shall be complied with
irrespective of the appeal, until the matter has been settled through a legally valid decision.
The legally valid decision of the pension provider, the Finnish Centre for Pensions and the Pension
Appeal Court may be enforced in a similar manner to a legally valid judgement in a civil case.
Section 137
Correction of a clerical error or a calculation error
The pension provider and the Finnish Centre for Pensions shall correct obvious clerical or calculation
errors, or other comparable obvious errors in the decision it has given. However, the error shall not be
corrected if the correction leads to an unreasonable result for the party involved.
Section 138
Correction of factual errors
The pension provider or the Finnish Centre for Pensions may nullify its incorrect decision and decide on
the matter again, if the decision of the pension provider or the Finnish Centre for Pensions is clearly based
on faulty or deficient information, clearly incorrect implementation of the law, or a procedural error has
occurred when making the decision.
The pension provider or the Finnish Centre for Pensions shall not change its decision or nullify its
decision to the detriment of the party involved, unless the party involved has consented to this.
Section 139
Correction of a legally valid decision on the basis of new information
If new information is obtained in the matter, the pension provider shall re-investigate the matter decided
through a legally valid decision. In this instance, notwithstanding the previous legally valid decision, the
pension provider may grant a pension which had been denied or adjust a pension that has been granted
already to a greater amount. The Pension Appeal Court and the Insurance Court may also follow the same
procedure when considering an appeal. This kind of decision can be appealed as provided in sections
128–130.
Section 140
Nullifying a legally valid decision
If a legally valid decision given pursuant to this Act by the pension provider is based on inaccurate or
deficient information or is clearly contrary to the law, the Pension Appeal Court may, on the request of the
party involved or the pension provider, nullify the decision and refer the matter to be re-examined. The
same applies, on the request of the party involved or the Finnish Centre for Pensions, to a legally valid
decision given pursuant to this Act by the Finnish Centre for Pensions. The Pension Appeal Court shall
52
reserve an opportunity for the parties involved to be heard before deciding on the matter. Such a decision
may be appealed as provided in sections 128–130. (1314/2006)
If a legally valid decision given pursuant to this Act by the Pension Appeal Court or by the Insurance
Court is based on inaccurate or deficient information or is clearly contrary to the law, the Insurance Court
may, on the request of the party involved or the pension provider, nullify the decision and refer the matter
to be re-examined. The Insurance Court shall reserve an opportunity for the parties involved to be heard
before deciding on the matter. (1314/2006)
If the pension provider makes a prayer to nullify the decision, it may interrupt the payment of the pension
or pay the pension according to its prayer until the matter has been settled again.
The nullification of the decision shall be applied for within five years of the date when the decision
became legally valid. The decision may also be nullified on an application made after the time limit for
especially weighty reasons. (1314/2006)
PART III
PROVISIONS ON INSURANCE AND THE DIVISION OF COSTS
Chapter 10
Arranging pension provision and the pension contribution
Arranging pension provision
Section 141
The employer’s obligation to arrange pension provision for the employee
The employer shall arrange pension provision for the employees referred to in sections 4, 5 and 7 during
the month following the payment of the wage if the employer has paid the employee the earnings referred
to in section 70 or section 72 to an amount of at least EUR 41.89 per month.
The employer shall arrange pension provision for the employees:
1) with a pension insurance company;
2) with an industry-wide pension fund by establishing an industry-wide pension fund in the manner
referred to in the Insurance Funds Act, or by joining an industry-wide pension fund as partner within the
sector where the employer operates; or
3) with a company pension fund by establishing a company pension fund in the manner referred to in the
Company Pension Funds Act or by joining a joint company pension fund which the employer may join
under the Company Pension Funds Act.
The employer may arrange pension provision for its employees with two or more pension providers,
provided that the employee groups included in each pension arrangement are defined sufficiently clearly.
Section 142
Arranging pension provision by taking out insurance with a pension insurance company
53
When the employer arranges pension provision for its employees by taking out insurance with a pension
insurance company, the employer shall submit an application for insurance to the chosen pension
insurance company during the month following the payment of the wages. On the acceptance of the
application for insurance, an insurance contract is established between the pension insurance company
and the employer. More detailed provisions on the arranging of pension insurance are issued in the
insurance terms and conditions confirmed by the Ministry of Social Affairs and Health.
Section 143
Provision and termination of insurance
The pension insurance company shall grant and maintain in force the insurance policy applied for from
the insurance company. However, the pension insurance company may terminate the insurance policy
without following any specific notice procedure if the employer has not reported by the end of January
that it has paid the wages covered by this Act during the preceding calendar year. In this case, the pension
insurance company shall ensure that the employer is no longer obligated to take out pension insurance.
The employer terminates the insurance policy by giving notice in writing at least three months before the
date of termination of the insurance policy in the manner determined in more detail in the insurance terms
and conditions. The insurance policy shall not, however, end as a consequence of the notice of
termination until a period of at least one year has elapsed from the start of the insurance policy. The notice
of termination of the insurance policy does not release the employer from the obligation to take out
pension insurance under this Act. (1274/2006)
Section 144
Notifications to be made for handling insurance
The employer that has concluded an insurance contract shall report to the pension insurance company,
within the time limit set out in the insurance contract, the employer’s identification data, the names,
personal identity codes and salary information of the employees working under an employment contract
covered by this Act as provided in more detail through Government decree.
The obligation to notify also concerns employers who have arranged pension provision for employees
with an industry-wide pension fund or a company pension fund.
Section 145
Correcting data on the date of commencement and termination of the employment contract
The provisions of the Personal Data Act (523/1999) are applied with respect to the controller’s obligation
to correct inaccurate data.
Section 146
Requirement of the employer to make monthly notifications and contribution payments
If the employer has neglected its obligations pursuant to this Act, a Government decree or the insurance
contract to make notifications and contribution payments, the pension insurance company may order the
employer that has concluded the insurance contract to report the information referred to in section 144
and to pay the pension contribution based on the reported data monthly. The same rule applies when the
employer has arranged pension provision for its employees with an industry-wide pension fund or a
company pension fund.
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Section 147
Temporary employer
An employer who:
1) does not employ any employees on a continuous basis; and
2) whose wages paid to employees with fixed-term employment contracts over a six-month period do not
exceed EUR 6,000 in total, may arrange pension provision for the employees with a pension insurance
company without filing an insurance application, in which case the employer shall report the employer’s
identification data, the employee’s name, personal identity code and salary information to the pension
insurance company chosen by the employer and pay the pension contribution based on the reported wage
by the 20th
of the month following the month of the payment of the wages (temporary employer).
More detailed provisions on the temporary employer’s obligation to notify and payment of the pension
contribution referred to in subsection 1 are issued through Government decree.
Section 148
Provision of information on the pension provider
The employer shall inform the employee about the pension provider with whom the employer has
arranged pension provision pursuant to this Act for its employees.
Section 149 (1097/2008)
Requirements for exempting a foreign employer from the obligation to take out insurance
The Finnish Centre for Pensions may, on application, exempt a foreign employer from the obligation to
arrange pension provision pursuant to this Act for the employees referred to in section 4(3)(3) which this
employer sends to work in Finland for a period longer than two years or whose work in Finland as a
posted worker continues for unexpected reasons for more than two years. A prerequisite for exemption is
that the employer has arranged pension provision for the posted employee for the period of work in
Finland. The employer shall present clarification that pension provision has been arranged. An exemption
is granted for a maximum of five years from the start of the employment in Finland.
Section 150
Insurance for an employee working abroad
The Finnish employer shall arrange insurance pursuant to this Act for the employee referred to in section
5(1) and 5(2). However, if the employer proves that pension provision has been arranged in some other
way for the groups of employees referred to in section 5(2) such that the pension provision as a whole
may be considered as corresponding to pension provision pursuant to this Act, the Finnish Centre for
Pensions may, on application, exempt the employer from the obligation to take out insurance for the
employees belonging to such a group for the period of the employment abroad that has continued for
more than two years. The exemption is granted at the earliest from the beginning of the calendar year
during which it has been applied for.
The employer may arrange pension provision under this Act for an employee who is sent from Finland
(posted employee) to work:
55
1) in a Group company which is part of the same economic entity as the Finnish company, even if the
employment relationship with the Finnish employer is not maintained;
2) in some other company where the Finnish company exercises power of decision, even if the
employment relationship with the Finnish employer is not maintained; or
3) in a country where the EU Regulation on social security or a social security agreement is applied also
in situations where the employee’s employment relationship with the Finnish sending employer is
maintained and the employee’s pension provision is, as a consequence of the provisions of the Regulation
or the social security agreement, arranged in the country of employment.
In addition, the Finnish employer may arrange pension provision pursuant to this Act for an employee
hired abroad (locally hired employee), if the employee is employed by:
1) the Finnish employer;
2) a Group company which is part of the same economic entity as the Finnish company; or
3) a company where the Finnish company exercises power of decision.
The employee shall be covered by Finnish social security legislation when the employment referred to in
subsection 2 or subsection 3 starts.
The employer may arrange pension provision under subsections 2 and 3 for the employee even if
mandatory pension provision is arranged for the employee in a country where the EU Regulation on
social security or a social security agreement is applied.
If the employer arranges pension provision under subsection 1 after two years or pension provision under
subsection 2, 3 or 5, the pensionable earnings may be set at a lower amount than would otherwise be the
case under this Act, provided that other pension provision has been arranged for the employee for the
same work.
Section 151
Employer’s right to obtain a decision on the earnings on which the insurance is based
At the request of the employer, the pension provider shall give a decision on whether the wage or other
remuneration payable to the employee constitutes earnings on the basis of which the employer has to
arrange pension provision pursuant to this Act. The decision is given by the pension provider with whom
the employer has arranged or is about to arrange pension provision pursuant to this Act for the employees.
Pension contribution
Section 152
Pension contribution
The pension contribution levied in order to finance pension provision pursuant to this Act consists of the
employer’s contribution and the employee’s contribution.
The employer withholds the employee’s pension contribution from the wage paid to the employee
(earnings from work) in connection with the payment of the wages and pays the pension contribution in
its entirety to the pension provider with whom the employer has arranged pension provision pursuant to
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this Act for its employees. The employer’s obligations towards the pension provider also include the
employee’s share of the pension contribution. More detailed provisions on the withholding of the
employee’s pension contribution are given by Government decree.
The employee’s pension contribution is also withheld from the supplementary daily allowance awarded
by a contributory sickness fund, as referred to in the Insurance Funds Act, and from the wage paid by
some other substitute payer.
The earnings that the pension contribution is based on are determined in accordance with sections 70 and
72.
When earnings-related pension insurance has been taken out:
1) with a pension insurance company, the pension contribution is determined according to the calculation
criteria set out in section 166;
2) with an industry-wide pension fund, the pension contribution is determined according to the calculation
criteria set out in section 166 and the rules of the industry-wide pension fund; or
3) with a company pension fund, the pension contribution, i.e. the contribution to the pension fund, is
determined according to the Company Pension Funds Act and the rules of the company pension fund.
Section 153
Amount of the employee’s pension contribution
The employee’s pension contribution amounts to three per cent, increased by half of the percentage by
which the average pension contribution for insurance pursuant to this Act, as a percentage of the wage,
exceeds the figure 18.2. The average pension contribution is calculated taking into account the reductions
in the contribution referred to in section 169(3) but without the increase to the contribution for persons
who have reached the age of 53. The employee’s pension contribution from the start of the month after
the employee reaches the age of 53 amounts to the employee’s pension contribution referred to above,
increased by the factor 19/15.
The Ministry of Social Affairs and Health issues the employee’s pension contribution percentages to be
applied by decree the following year.
Section 154
Retroactive withholding of the employee’s pension contribution
If, due to an obvious error, the employee’s pension contribution has not been withheld in connection with
the payment of the wages, the employer may withhold the contribution that was not withheld in
connection with the previous wage payment at most in connection with the following two wage
payments.
If, in connection with the wage payment, the employee has not been paid wages that are sufficient for
withholding the employee’s pension contribution and the employee still accrues pension rights, the
employer may withhold the employee’s pension contribution within one year in connection with the
following wage payments.
Section 155
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Exemption from retroactive payment of the pension contribution
If the employer, due to changes in legal praxis or some other comparable reason, is liable to arrange
insurance pursuant to this Act for a retroactive period for an employee whose employment contract has
not previously been considered to be covered by this Act, the Finnish Centre for Pensions may, on
application by the employer, exempt the employer fully or in part from the obligation to pay pension
contributions for the period before such a reason occurred.
Section 156
Co-owner’s or partner’s responsibility for pension contributions
If the employer is an organization or corporation, the obligations of which the co-owner or partner is
responsible for as they would be for his or her own debt, the co-owner or partner is also responsible for
the organization’s or corporation’s pension contributions.
Section 157
Responsibility of a bankrupt’s estate for pension contributions
If an employer who has taken out insurance pursuant to this Act is declared bankrupt, the employer’s
rights and obligations based on this insurance are transferred from the start of the bankruptcy to the
bankruptcy estate. The pension contributions for the period of bankruptcy are paid by the bankruptcy
estate .
Section 158
Statute-barring of pension contributions
The pension provider shall debit the pension contribution based on this Act within five years of the due
date of the pension contribution under the insurance terms and conditions or the regulations or, in the case
of a temporary employer who has arranged pension provision in the manner referred to in section 147,
from the beginning of the year following the year of the wage payment.
If pensionable earnings more than five years old are retroactively added to the employee’s earnings on the
basis of the employee’s clarification in the manner referred to in section 75 b(2) or on some other
grounds, the pension provider shall debit the pension contribution on the basis of these earnings within
ten years of the date when the pension contribution for the employment contract in question would have
fallen due according to the insurance terms and conditions. However, the pension contribution for a
temporary employer shall be debited within ten years of the beginning of the year following the year of
the wage payment. (1097/2008)
Section 159 (1164/2007)
Distrainability of the pension contribution
The pension contribution imposed by the pension provider pursuant to this Act and the increased pension
contribution referred to in section 163 as well as in section 186(5) may be distrained, including penalty
interest, without a judgment or decision as provided in the Act on the Enforcement of Taxes and Charges.
Section 160
Restitution of unduly paid pension contribution
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If the employer has reported monthly earnings of less than EUR 41.89 to the pension provider, these
earnings accrue pension rights, notwithstanding the provisions in section 4(3)(1).
On the application of the employer, the pension contribution paid for monthly earnings of less than EUR
41.89 is restituted to the employer, but not, however, for a longer period than the current and the
immediately preceding calendar year. In this case, the employer shall restitute the employee’s share of the
contribution to the employee. The earnings on which the restituted pension contributions were based do
not accrue pension rights.
Section 161
Restitution of employee’s pension contributions withheld unduly
The employer shall, on the employee’s request, restitute to the employee the employee’s pension
contributions which the employer has withheld without due cause or the share of the contribution which
exceeds the employee’s pension contribution under the Act.
The employee’s pension contributions which have been withheld from monthly earnings of less than EUR
41.89 are not restituted to the employee if the employee accrues pension rights on the basis of these
monthly earnings in the manner referred to in section 160.
Section 162
Statute-barring of the restitution of unduly paid pension contributions and the employee’s pension
contributions
The restitution of unduly paid pension contributions and the employee’s pension contributions becomes
statute-barred within five years of the payment date of the pension contribution or the date of withholding
the employee’s contribution, unless the statute-barring has been interrupted before that. The limitation
period is interrupted as provided in section 10 or 11 of the Act on Limitations for Debts. A new limitation
period of five years starts from the interruption of the limitation period. The five-year limitation period
may be extended as provided in section 11(3) of the Act on Limitations for Debts.
Section 163
Increase for neglect
The pension provider may impose on the employer, on the basis of an estimate, a pension contribution
which has been increased to a maximum of twofold and which may be considered reasonable, if the
employer fails to:
1) arrange pension provision pursuant to this Act within the time limit referred to in section 141(1);
2) report the data referred to in section 144(1) or in section 146 within the time limit referred to in the
relevant section of law; or
3) report the data referred to in section 147 within the time limit referred to in the said section of law.
When imposing the increased contribution for the period of the failure as referred to in subsection 1,
paragraphs 1–3, the factors taken into account are the length of the period of failure, the recurrence of the
failure and other comparable factors relating to the assessment of the blameworthiness of the failure. At
the request of the employer, the pension provider shall give the employer an appealable decision on the
increased contribution.
59
Section 164
Penalty interest on the pension contribution
If the employer has failed to pay the pension contribution within the time limit specified under this Act,
the insurance terms and conditions or the regulations of the industry-wide pension fund or company
pension fund, the employer shall pay penalty interest to the pension provider according to the interest rate
referred to in section 4(1) of the Interest Rate Act (section 4 of the Interest Rate Act) for the period of
delay to the payment.
Chapter 11
Pension insurance terms and conditions and calculation criteria
Section 165
Terms and conditions of pension insurance
The pension insurance company shall apply for confirmation of the insurance terms and conditions for
pension insurance referred to in section 142 from the Ministry of Social Affairs and Health.
The rules of a company pension fund and an industry-wide pension fund shall contain the necessary
provisions for the implementation of pension provision.
Section 166
Calculation criteria for the contributions, technical provisions and pension liability
A pension insurance company and an industry-wide pension fund shall apply for the confirmation of the
calculation criteria for the contributions and the technical provisions from the Ministry of Social Affairs
and Health.
The Ministry of Social Affairs and Health issues the calculation criteria for the pension liability of
company pension funds by decree.
Section 167
Uniformity of the terms and conditions and the calculation criteria
The Ministry of Social Affairs and Health shall not, without special reason, confirm differences in the
terms and conditions of pension insurance or in the calculation criteria which hamper the implementation
of this Act or the handling of matters common to the pension providers.
Section 168
Drawing up the calculation criteria
The calculation criteria for the contributions, the technical provisions and the pension liability shall be
drawn up taking primarily into account the safeguarding of the employees’ and pension recipients’
benefits insured under this Act, and the provisions in sections 174–182 as well as under section 5 of the
Act on the Finnish Centre for Pensions regarding the division of the liability and other costs arising from
the pensions. In addition, in order to cover the costs referred to in sections 178–181 as well as in section 5
60
of the Act on the Finnish Centre for Pensions, which are financed jointly, a method of advance funding
may be used. (1112/2007)
The calculation criteria for the technical provisions and the pension liability shall include the grounds for
the equity linked buffer fund. The calculation criteria shall be drawn up so that the equity linked buffer
fund may reduce the pension provider’s technical provisions or pension liability by a maximum amount
corresponding to 10 per cent of the technical provisions referred to in section 10(2) of the Act on the
Calculation of the Pension Provider’s Solvency Border and the Covering of the Technical Provisions
(1114/2006), from which the equalisation amount referred to in section 14 of the Pension Insurance
Companies Act and the provision for bonuses and losses appropriated to the policyholders, the
equalisation amount referred to in section 79 of the Insurance Funds Act, the technical provisions arising
from supplementary pension provision referred to in section 32(5) of the Implementing Act of the
Employees Pensions Act (396/2006) and the technical provisions under section 138 of the Self-Employed
Persons’ Pensions Act (1272/2006) and section 29 of the Implementing Act of the Self-Employed
Persons’ Pensions Act (1273/2006) have, however, been deducted. The equity linked buffer fund shall be
of the same size in relation to the aforesaid technical provisions for each pension provider. The basis for
the annual change to the equity linked buffer fund is the proportion of the average annual rate of return on
equities of one-tenth of the aforesaid technical provisions. The adjustment for the annual change is made
before the possible deduction following from the application of sections 170 and 171. The calculation
criteria shall include an annual clearing between the pension providers of the proportional share of the
equity linked buffer fund as part of the division of the costs under section 179. If the equity linked buffer
fund after the clearing does not reach the aforementioned lower limit of 10 per cent, the deficit is covered
by reducing each pension provider’s unallocated insurance reserve or provision for future bonuses and
losses. (1363/2007)
The average annual rate of return on equities means the average annual rate of return on the investments
of the pension providers pursuing activities under this Act and the Seamen’s Pension Fund which are
classified in investment category IV, subcategory 1, referred to in section 6 of the Act on the Calculation
of the Pension Provider’s Solvency Border and the Covering of the Technical Provisions, reduced by one
percentage point. When calculating the average annual rate of return, an individual pension provider’s
share of the investments referred to above may amount to a maximum of 15 per cent. The average annual
rate of return is calculated by the Finnish Centre for Pensions on the basis of the data reported by the
pension providers. (1121/2006)
Section 169
Calculation criteria of the contributions payable to the pension insurance companies
The calculation criteria of the contributions payable to the pension insurance company shall state how the
contributions are calculated and how the contribution is divided into components levied for different
types of costs. The calculation criteria may be drawn up so that the employer’s realised expenditure for
disability pensions and rehabilitation allowances is taken into account when determining the contribution.
When determining the size of the contribution of the pension insurance companies, the pension insurance
company’s share of the costs stated in sections 178–181 and in section 5 of the Act on the Finnish Centre
for Pensions, which are to be financed jointly, is taken into account annually. (1112/2007)
When earnings-related pension insurance has been taken out with a pension insurance company, the
employer is entitled to a share of the surplus possibly generated by the insurance business. The
calculation criteria for contribution reductions or other benefits following from this surplus shall be drawn
up so that the total amount of the surplus and the way the surplus was generated are taken into account to
a reasonable extent. The reductions to the contributions and other comparable benefits shall not put at risk
61
the meeting of the solvency requirements laid down in chapter 7 of the Pension Insurance Companies
Acts.
The provisions of subsection 3 shall not apply to temporary employers who have arranged pension
provision for the employees in the manner referred to in section 147.
Section 170
Changing the calculation criteria for the technical provisions
If the calculation criteria for the technical provisions or for the pension liability are changed due to the
requirements of section 168, so that the amount of liability arising from pensions and accrued pension
rights increases, the costs arising from this increase are included in the costs that are referred to in section
179 and which are financed jointly by the pension providers. If, however, the change concerns the
calculation criteria for the technical provisions or pension liability to be calculated for old-age pensions,
the costs arising from the change are primarily covered by reducing the amount of the equity linked buffer
fund referred to in section 168(2), or assets which otherwise would have to be used to increase the
funding referred to in section 171. (1121/2006)
If the calculation criteria for the technical provisions or the pension liability are changed so that the
amount of liability arising from pensions and accrued pension rights decreases, the available assets are
used to cover costs referred to in section 179.
Section 171
Supplementing old-age pension liability (1121/2006)
The funded components of the old-age pensions are supplemented annually in order to increase the
funding by an amount which is calculated using the pension liability supplementary coefficient, which is
to be included in the calculation criteria under section 166. The supplementary coefficient shall be
determined taking into account the requirements resulting from the need to safeguard the pensions as well
as the solvency of the pension providers.
If the total amount of the pension providers’ equity linked buffer funds is larger than five per cent of the
total amount of their technical provisions or pension liabilities referred to in section 10(2) of the Act on
the Calculation of the Pension Provider’s Solvency Border and the Covering of Technical Provisions, the
share in excess shall be used to supplement the funded components referred to in subsection 1 of this
section. (1121/2006)
The supplementation referred to in this section may be allocated differently to the funded components of
the future and commenced old-age pensions of different age groups, so that in the long term the
development in the contribution level is even. (1121/2006)
The assets intended for the supplementation pursuant to subsections 2 and 3 above may be used to cover
the costs referred to in section 170 arising from changes to the calculation criteria for the technical
provisions or the pension liability calculated for the old-age pensions. (1121/2006)
Section 172
Cooperation between the pension providers when preparing the insurance terms and conditions and the
calculation criteria
62
The pension providers shall cooperate in the preparation of insurance terms and conditions, model rules,
and calculation criteria in order to achieve the objective laid down in section 167.
Chapter 12
Division of costs between the pension providers
Section 173
Pension providers’ mutual liability for pensions and the costs for rehabilitation
Each pension provider is responsible for the part of the pension and rehabilitation allowance pursuant to
this Act which has been funded with the said pension provider in accordance with sections 174–177. In
other respects, the pension providers assume joint liability for the costs arising from the pensions.
Section 174
Pension provider’s liability for the old-age pension
Each pension provider assumes liability for:
1) the part of the employee’s and pension recipient’s old-age pension which is based on the employee’s
work before the year when the employee reaches the age of 55 and which corresponds to an annual
accrual rate of 0.5 per cent, using 65 years as the retirement age and calculated according to the
calculation criteria confirmed or issued by the Ministry of Social Affairs and Health. The pension
provider’s liability does not, however, include increases arising from the adjustment of annual earnings in
line with the wage coefficient under section 96 or an index adjustment under section 98 carried out after
the start of the pension, together with changes arising from the application of the life expectancy
coefficient;
2) the amount that has been transferred to the component which the pension provider is responsible for
pursuant to section 171 and the calculation criteria confirmed or issued by the Ministry of Social Affairs
and Health; and
3) the amount which has separately been transferred to the old-age pension component which the pension
provider is responsible for in order to increase the funded component.
Section 175
Pension provider’s liability for the disability pension
The costs for a disability pension, whereby the total amount of the insured person’s earnings pursuant to
this Act and the Seamen’s Pensions Act for the last two years of the reference period under section 76 is at
least EUR 12,566.70, are the liability of each pension provider with whom the insured person has been
covered during the aforementioned calendar years to the same proportion as the share of the earnings
pursuant to this Act insured with the pension provider in question of the total amount of the
corresponding earnings under the pension acts stated in section 3 and the earnings referred to in section
74 and section 76(2) for the said calendar years.
The pension provider is not liable for the disability pension insofar as the earnings covered by this Act
that are insured with the pension provider, with respect to a temporary employer as referred to under
section 147 of this Act, or the same insurance policy of other employers, do not exceed the limit of EUR
2,094.45 during the said two calendar years.
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The pension referred to above in subsection 1 also includes the pension component referred to in sections
153(2) and 153(3) of the Seamen’s Pensions Act which is granted on the basis of that Act. (1292/2006)
The pension provider’s liability does not, however, include:
1) the rehabilitation increment under section 30;
2) the pension component accrued for unpaid periods referred to in section 74;
3) the increase arising from an index adjustment under section 98 carried out after the start of the pension;
and also
4) a lump sum increase in the disability pension under section 81.
Section 176
Pension provider’s liability for rehabilitation allowance and other rehabilitation costs
The pension provider’s liability for the rehabilitation allowance is equal to the pension provider’s liability
determined in the manner referred to in section 175 for the disability pension to which the insured person
would be entitled if the person had become incapable of work to an extent giving entitlement to a
disability pension at the point in time referred to in section 28.
The pension provider that provides the rehabilitation is solely liable for the costs relating to rehabilitation
other than those arising from the cash rehabilitation benefit and rehabilitation allowance.
Section 177
Pension provider’s liability for registered supplementary benefit
The pension provider is liable for supplementary benefits, as referred to in section 32(5) of the
Implementing Act of the Employees Pensions Act (396/2006) and registered under the Employees’
Pensions Act (395/1961), ,insofar as the benefit corresponds to the contributions payable to the pension
provider or the pension liability calculated for the pension provider in accordance with the calculation
criteria issued or confirmed by the Ministry of Social Affairs and Health.
Section 178
Pension provider’s liability for the pension component accrued for unpaid periods
The pension component accrued for unpaid periods referred to in section 74 is the joint liability of the
pension providers handling pension provision under the pension acts stated in section 3(1) and 3(2) in
proportion to the earnings insured with the pension provider in question. The criteria for the pension
providers’ possible preliminary contribution and final contribution, which are applied for by the Finnish
Centre for Pensions, as well as the due dates for these contributions are included in the criteria for the
division of liability as referred to in section 183(2).
Section 179
Pension provider’s liability for jointly financed benefits
The pension providers, including the Seamen’s Pension Fund, are jointly liable for the following costs,
insofar as they are not covered from other sources:
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1) other old-age and disability pensions than those referred to in sections 174 and 175, with the exception
of the amount payable under sections 154 and 156 of the Seamen’s Pensions Act; (1292/2006)
2) the components of the pensions and rehabilitation allowances exceeding the amounts under sections
174–177; in this instance the cost for the rehabilitation allowance is considered to be entirely determined
pursuant to the pension act on the basis of which the rehabilitation allowance has been granted;
3) survivors’ pension;
4) part-time pension;
5) the rehabilitation increment;
6) the costs referred to in section 170 arising from changes to the calculation criteria for the technical
provisions and the pension liability;
7) the costs arising from the transfers referred to in section 174(1)(2 and 3);
8) the deficit arising from the fact that the employer has been exempted from paying contributions in
accordance with section 155; and
9) the cost components referred to in section 159(1)(1–7) of the Seamen’s Pensions Act that arise from
arranging pension provision under the said Act. (1292/2006)
The costs listed above in subsection 1 other than those for the rehabilitation allowance do not include the
pension components referred to in section 178.
The pension provider’s share of the costs for the old-age pension under subsection 1, paragraph 1, with
the exception of the costs for the old-age pensions paid as a lump sum in connection with a disability
pension and the costs under paragraph 8, are determined in proportion to the assets intended for the
financing of the costs that are to be financed jointly. The pension providers’ share of the disability pension
costs under subsection 1, paragraph 1, the costs for old-age pensions paid as a lump sum in connection
with a disability pension, as well as the costs under subsection 1, paragraphs 2–5 are determined in
proportion to the earnings insured with the pension provider in question. The pension providers’ share of
the costs under subsection 1, paragraphs 6 and 7 is determined as provided in more detail in the
calculation criteria under subsection 4. The pension provider’s share of the corresponding costs under
subsection 1, paragraph 9 is determined in the same manner as the jointly financed costs under subsection
1. When determining the pension provider’s share of the said costs, a factor which is also taken into
account is the transfer payment, which has been defined in the Act on Transfer Payment When State
Offices, Institutions or State-owned Companies are Converted into Limited Liability Companies
(1341/1992). (1292/2006)
More detailed provisions on the division of the costs in subsection 1 between the pension providers are
issued by a decree of the Ministry of Social Affairs and Health. The amounts needed for the division of
the jointly financed costs are determined:
1) in the pension insurance company’s calculation criteria referred to in section 166;
2) in the calculation criteria which the Ministry of Social Affairs and Health has issued by decree for the
industry-wide pension fund; and
3) in the company pension fund’s calculation criteria referred to in section 166.
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Section 180 (1112/2007)
Pension providers’ liability for the costs of the Finnish Centre for Pensions
The costs of the Finnish Centre for Pensions is the liability of the pension providers that handle pension
provision under the private and public-sector pension acts referred to in section 3 of the Employees
Pensions Act, as provided in section 5 of the Act on the Finnish Centre for Pensions.
Section 181 (1292/2006)
Liability in case of a pension provider’s bankruptcy
If, due to the bankruptcy of a pension provider or the Seamen’s Pension Fund, a pension, a rehabilitation
benefit, an increase resulting from an index adjustment under section 98, or a registered supplementary
benefit as referred to in section 32(5) of the Implementing Act to this Act remains fully or partially
unsecured, the pension providers, including the Seamen’s Pension Fund, are jointly liable for these
benefits in proportion to the earnings insured with the relevant pension provider or the Seamen’s Pension
Fund. In this case, pension under the Seamen’s Pensions Act means the component of the pension under
the Seamen’s Pensions Act, determined in section 153(2) of the Seamen’s Pensions Act, which
corresponds to the pension under the Employees Pensions Act. More detailed provisions on the pension
providers’ and the Seamen’s Pension Fund’s liability are issued through a decree of the Ministry of Social
Affairs and Health.
In this case, the pension providers, including the Seamen’s Pension Fund, are also jointly liable for the
equalisation amount referred to in section 14(3) of the Pension Insurance Companies Act or under section
79(3) of the Insurance Funds Act up to the minimum amount under the calculation criteria confirmed by
the Ministry of Social Affairs and Health.
Section 182
Contribution of the Unemployment Insurance Fund
The Unemployment Insurance Fund, as referred to in the Act on the Financing of Unemployment Benefits
(555/1998), pays a contribution to the Finnish Centre for Pensions that is used to cover the liability and
costs arising when periods of unemployment and training are taken into account as regards:
1) the pension providers referred to in this Act that handle pension insurance for employees;
2) the Seamen’s Pension Fund referred to in the Seamen’s Pensions Act;
3) the local government pension provider referred to in the Local Government Pensions Act;
4) the Central Church Fund, which handles pension provision under the Evangelical Lutheran Church
Pensions Act and the Survivors’ Pensions Act for the Evangelical Lutheran Church;
5) the Social Insurance Institution insofar as it handles pension provision referred to in section 13 of the
Act on the Social Insurance Institution;
6) the pension provider handling pension provision under the pension regulations issued pursuant to
section 11(2)(6) of the Act on the Bank of Finland; and
7) the Central Fund of the Orthodox Church, which handles pension provision under the pension
regulations issued pursuant to the Act on the Orthodox Church.
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The contribution of the Unemployment Insurance Fund is determined so that it is estimated to correspond
to the amount which would be obtained if a contribution corresponding to the average contribution under
this Act were paid for the earnings of the wage earners insured with the pension providers referred to in
subsection 1 on which the benefits referred to in section 74(3)(2–6) are based. In this case, the increased
contribution rate for employees who have reached the age of 53 is not taken into account in the average
contribution. (1274/2006)
The Unemployment Insurance Fund shall pay the contribution to the Finnish Centre for Pensions annually
within the time limit determined in the criteria for the division of liability. The Finnish Centre for
Pensions reimburses the assets received as a contribution to the pension providers mentioned in
subsection 1 in proportion to the earnings insured with the pension provider, so that the cost component of
the Finnish Centre for Pensions, which is the liability of the pension providers stated in subsection 1, is
deducted from the distributed assets before the reimbursement. More detailed provisions on the
reimbursement of the contribution are included in the criteria for the division of liability referred to in
section 183(2). (1112/2007)
The contribution of the Unemployment Insurance Fund referred to in subsection 2 is confirmed through a
decision of the Ministry of Social Affairs and Health on a proposal of the Finnish Centre for Pensions.
The Ministry of Social Affairs and Health may also confirm a preliminary contribution for the
Unemployment Insurance Fund on a joint proposal of the Finnish Centre for Pensions and the
Unemployment Insurance Fund.
Section 183
Clearing of costs
The Finnish Centre for Pensions establishes each calendar year how the mutual liability for the costs
referred to in sections 174–181 and the contribution of the Unemployment Fund referred to in section 182
of the pension providers implementing the acts under section 3 is divided for the previous calendar year,
taking into account what the private and public-sector pension providers, when acting as the last pension
provider as referred to in sections 107 and 109, have paid in pension or other benefits that are the liability
of another pension provider.
On the basis of the clearing, the Finnish Centre for Pensions determines the pension provider’s
compensation for the costs which are the liability of some other pension provider or the pension providers
jointly, or for the contribution referred to in section 182, and determines the pension provider’s payment
for the costs for which the pension provider assumes liability. The compensation and the payment, with
interest, and possible advance payments for their coverage are determined according to the criteria for the
division of liability confirmed by the Ministry of Social Affairs and Health on the proposal of the Finnish
Centre for Pensions, with the exception of the cost clearing between the private and public-sector pension
providers, with respect to which the agreement between the Finnish Centre for Pensions and the publicsector pension providers on the clearing of costs is applied. The grounds for the division of liability also
determine how the possible surplus or deficit of the Finnish Centre for Pensions arising in connection
with the division of liability is taken into account.
The pension provider shall report to the Finnish Centre for Pensions the information needed for the
clearing referred to in subsection 1 in the form and within time limit determined by the Finnish Centre for
Pensions in the manner specified in the criteria or agreement. If the pension provider neglects its
obligation to report the information, the Finnish Centre for Pensions provides an estimate of the pension
provider’s share of the costs. The Finnish Centre for Pensions adjusts the share of the costs in connection
with the following clearing.
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If the private-sector pension providers disagree over the division of costs, the Finnish Centre for Pensions
will settle the matter.
Section 184
Decision on the division of costs
The Finnish Centre for Pensions issues a decision to the private-sector pension providers on the division
of the costs referred to in section 183. The decision may be appealed as provided in Chapter 9.
Section 185
Pension provider’s right to conclude a contract
The pension providers may in individual cases, or in order to simplify the implementation, agree on the
division of costs in a manner that differs from that provided in this Chapter. In this instance, the principles
in this Chapter shall be complied with.
Chapter 13
Supervision of insurance
Section 186
General supervision of insurance and enforced insurance
The Finnish Centre for Pensions oversees that the employer fulfils the insurance obligation pursuant to
this Act.
If the employer neglects the obligation laid down in section 141 or section 142 to arrange pension
provision for its employees, the Finnish Centre for Pensions shall remind the employer to rectify this
failure. If the employer does not rectify the failure within the time limit set by the Finnish Centre for
Pensions, the Finnish Centre for Pensions takes out pension insurance at the employer’s expense with the
pension provider of its choice (enforced insurance).
If an employer who has arranged pension provision for its employees with two or more pension providers
has failed to arrange pension provision for some of the employees and does not, despite reminders, rectify
the failure within the time limit set by the Finnish Centre for Pensions, the Finnish Centre for Pensions
may stipulate by which pension arrangement the employees who are without insurance are to be covered.
If a temporary employer neglects the obligations laid down for it in section 141 or section 147, the
Finnish Centre for Pensions chooses a pension provider for the employer, and the pension provider debits
and levies the contribution from the employer.
If the Finnish Centre for Pensions has taken out insurance with a pension provider, as referred to in
subsections 2–4, this pension provider is entitled to levy a contribution from the employer, increased to a
maximum of twice the amount for the period of the failure. When determining the increased contribution,
the factors taken into account are the length of the period of the failure, the recurrence of the failure and
other comparable factors relating to the assessment of the blameworthiness of the failure. At the request
of the employer, the pension provider shall give the employer an appealable decision on the increased
contribution.
Section 187
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Pension provider’s obligation to supervise
The pension provider oversees that the employer who has arranged pension provision with the said
pension provider fulfils its reporting and insurance obligations under this Act.
The pension provider and the Finnish Centre for Pensions may agree on more detailed implementation of
the supervision pursuant to subsection 1 and section 186(1).
Section 188
Right of inspection of the pension provider and the Finnish Centre for Pensions
The pension provider and the Finnish Centre for Pensions have the right to inspect the employer’s
premises and the right to take other inspection measures in order to determine whether the employer has
fulfilled the obligations under this Act. The employer subject to the inspection shall, during the course of
the inspection, present the wage bookkeeping, working time records and, irrespective of the mode of
presentation or storage, all the other documentation which may affect the insurance obligation pursuant to
this Act of the employer that is being inspected.
In order to carry out the inspection, the Finnish Centre for Pensions and the pension provider are entitled
to receive executive assistance from the police and other authorities.
An inspection may be carried out in the employer’s home only if there are well-founded grounds to
suspect that the employer has neglected the insurance obligation under this Act and if the inspection is
necessary in order to settle the matter. An inspection in the employer’s home may only be carried out by
the police or the tax authorities.
Section 189
Evasion and misuse of the obligation to arrange pension provision
If:
1) in order to evade the obligation to arrange pension provision;
2) in order to avoid pension contributions;
3) in order to arrange unwarranted pension provision; or
4) for some other comparable reason, a meaning which does not correspond to the real nature or purpose
of the matter has been conferred on a legal act when deciding this obligation to arrange pension provision,
or when determining the pension contribution, or when processing a pension matter, the case shall be
proceeded in accordance with the real nature and purpose of the matter.
If the obvious purpose of an arrangement in a company has been to evade the provisions on the
employer’s liability for disability pensions, the pension provider may determine the contribution
according to the situation which prevailed before the said arrangement.
Section 190
Pension contribution fraud
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Chapter 29, sections 4 a and 4 b of the Penal Code (39/1889) lay down provisions on the penalties for
pension contribution fraud and aggravated pension contribution fraud.
PART IV
MISCELLANEOUS PROVISIONS
Chapter 14
Granting and gaining access to information and secrecy of information
Section 191
Applicable rules
The Act on the Openness of Government Activities (621/1999, Openness Act) is applied to the openness
of the documents and activities of the pension providers and the Finnish Centre for Pensions insofar as
the pension providers and the Finnish Centre for Pensions exercise public authority as referred to in
section 4(2) of the Openness Act, unless provided otherwise by this Act or some other Act.
Also, in instances when the issue is not one of exercising public authority as referred to in section 4(2) of
the Openness Act, the pension provider and the Finnish Centre for Pensions apply the provisions of the
Openness Act in matters relating to the implementation of this Act with respect to:
1) document secrecy;
2) non-disclosure;
3) prohibition of use;
4) sections 22–24 regarding secret documents; and
5) section 35, which includes penal provisions.
The provisions in Chapter 7 of the Openness Act on derogations from secrecy and declassification apply
when applying subsection 2 on the granting of access to information.
The provisions on the obligation to observe secrecy and the granting of access to information in Chapter
18, sections 6, 6 b and 6 c of the Insurance Companies Act (1062/1979), sections 132, 132 a and 132 c of
the Company Pension Funds Act, and sections 165, 165 a and 165 c of the Insurance Funds Act do not
apply when implementing this Act.
Section 192
Information on the employer’s financial position
Documents and information based on the implementation of this Act concerning the employer’s financial
position shall also be subject to secrecy in addition to the provisions of section 24(1)(20) of the Openness
Act concerning the secrecy of information regarding a private business.
Notwithstanding the secrecy provisions and other restrictions on the access to information, the pension
provider and the Finnish Centre for Pensions are entitled to grant access to information on the employer’s
default on receivables arising from insurance pursuant to this Act to other pension providers which handle
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tasks under the private-sector pension acts and to the Finnish Centre for Pensions for the supervision and
implementation of insurance under this Act.
Section 193
Employee’s and pension applicant’s right of access to information
The pension provider and the Finnish Centre for Pensions shall, at the request of the employee, give the
employee the information it has on the employee’s pension entitlement. In other respects, the acts which
lay down provisions on the party’s right of access to information, right to gain access to information on a
document which concerns the person in question and right to check the data stored in registers on the
person in question are the Act on the Openness of Government Activities and the Personal Data Act.
The pension provider shall provide the pension claimant in advance, either on the pension claims form or
in some other comparable manner, with information on where the information on the claimant may be
obtained and who may be granted access to the information in accordance with the law.
Section 194
Employer’s right of access to information
Notwithstanding the secrecy provisions and other restrictions on the access to information, the employer
is entitled to obtain from the pension provider the information on pensions granted under this Act which
are necessary for the employer’s bookkeeping, wage administration and for verifying the company’s
pension contribution together with other data necessary for the aforementioned purposes.
Section 195
Employer’s obligation to grant access to information
If it is necessary to obtain information on the employee’s employment and working conditions or other
comparable factors in order to settle an insurance, pension or rehabilitation matter being processed or
otherwise to implement the tasks in accordance with this Act or the Act on the Finnish Centre for
Pensions, the employer is obligated to grant access to the information to the pension provider, the Finnish
Centre for Pensions and an appellate body pursuant to this Act.
When requesting the information necessary for processing the employee’s pension or rehabilitation matter
from the employer, the employer may, without the consent of the employee, only be granted access to the
confidential information concerning the employee that is necessary in order to identify the information
requested from the employer.
Section 196
Clarification from the pension recipient on factors relating to the pension amount and the pension
entitlement
The pension provider may, irrespective of the pension recipient’s obligation to notify, request
clarifications from the pension recipient of factors affecting the amount of pension and the pension
entitlement if there is reason to suspect that changes have occurred in these factors.
Section 197
Information on the earnings forming the basis of pensionable benefits for unpaid periods
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The payer of a pensionable benefit referred to in section 74 paid for unpaid periods is obligated to report
the information on the recipient of the benefit it has paid, the date when the benefit was paid and the
earnings which the paid benefit are based on to the Finnish Centre for Pensions at the latest by the end of
February of the year following the year of payment of the benefit or by some other date notified by the
Finnish Centre for Pensions.
Section 198
Right to gain access to information for settling a matter or the implementation of statutory tasks
Notwithstanding the secrecy provisions and other restrictions on the access to information, the pension
provider, the Finnish Centre for Pensions and an appellate body under this Act are entitled to obtain:
1) from an employer, an insurance or a pension provider implementing statutory insurance, the authorities
and other parties to which the Openness Act is applied, the information necessary for settling an
insurance, pension or benefit matter being processed or which is otherwise necessary for the
implementation of tasks laid down pursuant to this Act or the Act on the Finnish Centre for Pensions, the
EU Regulation on social security or its Implementing Regulation or a social security agreement;
2) from a doctor or other health care professional as referred to in the Act on Health Care Professionals, a
health care unit as referred to in section 2, paragraph 4 of the Act on the Status and Rights of Patients
(785/1992), and a party providing rehabilitation, or other health care unit, producer of social services or
care institution, a statement on request drawn up by the said person or institution and other information on
the pension applicant’s patient documents, rehabilitation, health, care and work ability necessary for
implementing the tasks referred to above in paragraph 1, if the applicant does not him or herself provide
the aforementioned information.
The information referred to in this section may be retrieved through a technical interface without the
consent of the person whose interests are protected by the secrecy provision. (1274/2006)
Section 199
Right of the Finnish Centre for Pensions to gain access to information for supervision
Notwithstanding the secrecy provisions and other restrictions on the access to information, the Finnish
Centre for Pensions is entitled to obtain from the employer, the insurance and pension provider
implementing statutory insurance, the authorities and other parties to which the Openness Act is applied
the information necessary in order to fulfil the supervisory obligation laid down in section 186(1). In
addition, the Finnish Centre for Pensions is entitled to obtain, for the aforementioned purpose, the names,
business IDs or employer’s personal identity codes, contact data and annual notifications or data
corresponding to the annual notification, and the fields of industry of employers who have paid wages or
other remuneration to employees, as well as information on the remunerations that these employers have
paid for the work and related employer payments from the tax authorities as mass data.
The Finnish Centre for Pensions is entitled to gain access to the data referred to in subsection 1 even if it
has not in its request for the data identified the employers to be subject to supervision through the
processing of mass data or even if the supervisory process is not yet pending. In addition, the Finnish
Centre for Pensions is entitled to gain access to the aforementioned mass data even if the taxation has not
yet been confirmed. For the implementation of the supervisory task, the Finnish Centre for Pensions is
entitled to combine and process the personal data referred to in subsection 1. The combined data may be
stored for five years, but, however, not beyond the end of the supervisory process. Combined data shall
not be transferred.
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The data referred to in this section may be retrieved through a technical interface without the consent of
the person whose interests are protected by the secrecy provision.
Section 200
Right of the pension provider to gain access to information for supervision
Notwithstanding the secrecy provisions and other restrictions on the access to information, the pension
provider is entitled to gain access to the data necessary for supervision referred to in sections 187–189
from other pension providers handling tasks under the earnings-related pension acts and from the Finnish
Centre for Pensions.
Section 201 (1121/2006)
Information for supplementing old-age pension liabilities
Notwithstanding the secrecy provisions and other restrictions on the access to information, the Finnish
Centre for Pensions has the right to obtain from the pension provider, within the time limit and in the
manner determined by the Finnish Centre for Pensions, the information on the pension provider’s
technical provisions or pension liability and solvency margin necessary for calculating the pension
liability supplementary coefficient under section 171(1), as well as the information on the amounts and
rates of return of investments classified in investment category IV, subcategory 1 referred to in section 6
of the Act on the Calculation of the Pension Provider’s Solvency Border and the Covering of Technical
Provisions necessary for calculating the average annual rate of return under section 168(3).
Section 202 (1112/2007)
Gratuitousness of the information
The pension provider, the Finnish Centre for Pensions and an appellate body under this Act are entitled to
gain access to the information to which they are entitled pursuant to this Act free of charge. If the
information is needed in a certain format and if this causes significant extra costs for the party granting
access to the information, the costs shall be reimbursed, however. The right of the Finnish Centre for
Pensions to levy operation-specific service charges for its services is laid down in section 5(1) of the Act
on the Finnish Centre for Pensions.
Section 203
Granting access to information within an insurance company Group
Notwithstanding the secrecy provisions and other restrictions on the access to information, the pension
insurance company and its representative may grant another company which is part of the same insurance
company Group as referred to in Chapter 14 b of the Insurance Companies Act or the same consortium as
referred to in Chapter 18, section 6 b(2) of the Insurance Companies Act access to information coming
within the scope of the obligation to observe secrecy which is necessary to undertake the tasks pursuant to
this Act.
Notwithstanding the secrecy provisions and other restrictions on the access to information, the pension
insurance company may grant a company as referred to in subsection 1 access to information necessary
for customer service, taking care of customer relations and other customer management. Such information
includes data on the employer’s or self-employed person’s name, personal identity code, business ID as
well as client ID, contact information, data on the company’s ownership and insurance arrangements,
wage bill and other comparable data relating to customer management.
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The provisions on the obligation to observe secrecy and the breaching of this obligation also apply to
those who have gained access to information who are subject to secrecy pursuant to this section.
Section 204
Granting access to information for voluntary supplementary group pension provision
In addition to the provisions of the Openness Act, the pension provider and the Finnish Centre for
Pensions, notwithstanding the secrecy provisions and other restrictions on the access to information, are
entitled to give the employees’ names and addresses, personal identity codes, data on the pension amounts
and factors which affect the pension amount as well as other information necessary for the purposes
below to a life insurance company, an industry-wide pension fund or a company pension fund:
1) for the continuous handling of free-form voluntary supplementary group pension provision relating to
pension provision governed by this Act;
2) for agreeing the terms and conditions for new supplementary group pension provision, when previous
supplementary pension provision is terminated on the employer’s initiative and replaced by the
corresponding new supplementary pension provision; the provider of the new supplementary pension
insurance shall in that case provide the Finnish Centre for Pensions with information indicating that new
supplementary pension provision means replacing the previous supplementary pension provision with
new provision;
3) for determining the final contents of new supplementary pension provision; the prerequisite is,
however, that the life insurance company, industry-wide pension fund or company pension fund has taken
care that the employees covered by the supplementary pension arrangement have, after the insurance
contract or pension arrangement has been accepted, duly been informed about the life insurance
company’s, industry-wide pension fund’s or company pension fund’s possibility to gain access to the
necessary data and that the employee has not expressly declined the supplementary pension arrangement
or refused the granting of access to his or her personal data.
When seeking a party that will arrange new supplementary pension provision, the pension provider and
the Finnish Centre for Pensions are, in addition to what is provided in the Openness Act and
notwithstanding the secrecy provisions and other restrictions on the access to information, entitled to
grant the life insurance company, industry-wide pension fund or company pension fund access to
information on the employees’ employment contracts, pension rights, age and gender distribution and
factors which affect the pension amount for determining the supplementary pension provision and its
costs.
Section 205
Granting access to information in order to solve offences or irregularities
In order to solve offences and irregularities, the pension provider and the Finnish Centre for Pensions
have the right, notwithstanding the secrecy provisions and other restrictions on the access to information,
to grant access to data based on the implementation of this Act to the Ministry, the tax authorities and to
institutions or associations which administrate the statutory social security system and whose social
security benefit the pension under this Act affects.
The information to be granted access to concerning the person who receives or has received a pension
under this Act includes:
1) the personal identity code and other identifying data;
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2) data on the pensions that have been paid;
3) data on the employer; and
4) other comparable data which are necessary for combining personal data in order to solve offences and
irregularities relating to social security and for other one-off supervisory measures.
The pension provider and the Finnish Centre for Pensions have the right referred to in subsection 1 to
grant access to data referred to in subsection 2 also to the police and prosecuting authorities, insofar as the
data are necessary for the solving and prosecution of offences.
However, in situations referred to in this section access shall not be granted to data on the employee’s
health or data which are intended to describe the grounds for the employee’s need for social welfare.
Section 206
Granting access to information to the authorities and a controller in credit data operations
Notwithstanding the secrecy provisions and other restrictions on the access to information, the pension
provider and the Finnish Centre for Pensions are entitled, in addition to what is provided in the Openness
Act, to grant access to information based on the implementation of this Act as follows:
1) to the relevant authority or institution, the data necessary for the implementation of the tasks under the
EU Regulation on social security or a social security agreement;
2) to the tax administration, the data necessary for fulfilling the supervisory obligation of the tax
administration laid down in the Prepayment of Tax Act in cases where there is reason to suspect that the
employer has not fulfilled the employer’s tax withholding obligation;
3) to a controller in credit data operations, information on the employer’s distrainable pension
contribution receivables based on this Act, which the controller of the credit data register is entitled by
law to store in the credit data register.
Section 207
Granting access to information for employees’ group life insurance
Notwithstanding the secrecy provisions and other restrictions on the access to information, the
Employees’ Group Life Insurance Pool and the Farmers’ Social Insurance Institution, which, under the
authorisation of the life insurance companies and accident insurers, manage the claims handling regarding
employees’ group life insurance, are entitled to obtain from the Finnish Centre for Pensions the names,
personal identity codes and dates of death of deceased employees who have worked under employment
contracts covered by this Act, and the names and personal identity codes of their beneficiaries as well as
other comparable data which are necessary when determining whether the criteria for granting an
insurance amount from the group life insurance have been met.
The State Treasury and the local government pension provider are also entitled to obtain from the Finnish
Centre for Pensions, notwithstanding the secrecy provisions and other restrictions on the access to
information, the data referred to in subsection 1 for processing financial aid that corresponds to group life
insurance.
Section 208
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Transferring information
In addition to the provisions of the Openness Act, the pension provider and the Finnish Centre for
Pensions are entitled, notwithstanding the secrecy provisions and other restrictions on the access to
information, to grant access to information on pensions, pension rights or insurance obtained from a
pension provider which handles the implementation of the public-sector pension acts to the Social
Insurance Institution or some other recipient of information who is entitled to gain access to this
information by law.
The Finnish Centre for Pensions has the right mentioned in subsection 1 to give data obtained from the
employer by virtue of section 195 and data obtained from the employer, an insurance or pension provider
implementing statutory insurance, the tax and other authorities, as well as other parties covered by the
scope of the Openness Act by virtue of section 198 to a pension provider which handles the
implementation of the public-sector pension acts and which is entitled by law to gain access to these data
from the providers of information referred to or the Finnish Centre for Pensions.
Before granting access to the data referred to in subsections 1 and 2, the pension provider and the Finnish
Centre for Pensions shall agree with the pension providers which handle the implementation of the
public-sector pension acts on which data referred to above may be transferred and to whom they may be
transferred.
Section 209
Responsibility of the party transferring information
Before the pension provider or the Finnish Centre for Pensions transfers the information, it shall ensure
that the party gaining access to the data is entitled by law to obtain the transferred data from the party
which originally disclosed the information.
The pension provider, or the Finnish Centre for Pensions, which transfers the information on the grounds
laid down in this Chapter, is responsible for ensuring that the contents of the transferred data correspond
to the information obtained from the party that disclosed the information.
Section 210
Granting of access to information through a technical interface
The Finnish Centre for Pensions and, under its consent, the pension provider are entitled to open a
technical interface, in addition to the provisions on granting access to information through a technical
interface under section 29(3) of the Openness Act, with:
1) an organisation or institution which implements statutory social insurance for data in its personal data
file which the organisation or institution by the virtue of this Act or some other act is entitled to gain
access to for the implementation of its tasks;
2) the authorities that handle the implementation of tasks under the EU Regulation on social security or
under a social security agreement for data which the authority is entitled to gain access to by virtue of
section 206(1)(1);
3) the Social Insurance Institution as well as other recipients of information who are entitled to gain
access to data on pensions, pension rights and insurance from a pension provider which handles the
implementation of the public-sector pension acts for data referred to in section 208(1); and
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4) a life insurance company, an industry-wide pension fund or a company pension fund for the data
necessary for handling or arranging supplementary group pension provision as referred to in section 204.
In addition to what is provided in subsection 1, the Finnish Centre for Pensions is entitled to open a
technical interface with the Employees’ Group Life Insurance Pool, the Farmers’ Social Insurance
Institution, the State Treasury and the local government pension provider for the data referred to in
section 207 and with the pension providers which handle the implementation of the public-sector pension
acts for the data referred to in section 208(2).
However, a technical interface may be opened for granting access to data obtained from the pension
providers which handle the implementation of the public-sector pension acts in the manner referred to in
subsection 1, paragraph 3, or for granting access to data to the pension providers which handle the
implementation of the public-sector pension acts in the manner referred to in subsection 2 only if this has
been agreed upon pursuant to section 208(3).
Confidential information may also be retrieved without the consent of the person whose interests are
protected by the secrecy provision through a technical interface opened by virtue of this section.
Before opening the technical interface, the party requesting the information shall provide the party
opening the interface with information indicating that data protection has been taken care of
appropriately.
Chapter 15
Other provisions
Section 211
Advising employees and employers
The responsibility to provide advice in matters coming within the scope of application of this Act rests
primarily with the pension provider with whom the employer has arranged pension provision for the
employees.
Section 212
Cooperation of the pension providers
The pension providers shall cooperate in compiling statistics and in other matters related to the
implementation and development of the acts on the earnings-related pension.
Section 213
Compensation for certain services
The pension provider may levy a charge from the employer for certain services which it has provided at
the request of the employer.
Section 214
Decision on the amount of the theoretical pension
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If the employee has worked in two or more EU or EEA countries and he or she is applying for a
residence-based national pension, the employee is entitled, on request, to receive a decision on the
amount of the theoretical pension which the pension provider reports to the Social Insurance Institution
for the calculation of the employee’s residence-based national pension.
Section 215
Transfer of pension rights to the European Communities
The employee has the right to transfer the pension rights under this Act to the European Communities as
provided in the Act on the Transfer of Pension Rights between the Finnish Earnings-Related Pension
Scheme and the Pension Scheme of the European Communities (165/1999).
The pension rights transferred to and restored from the European Communities are governed by the
provisions of the Act on the Transfer of Pension Rights between the Finnish Earnings-Related Pension
Scheme and the Pension Scheme of the European Communities, insofar as the said Act contains
provisions which differ from the provisions of this Act. (1274/2006)
Section 216
Executive assistance
The pension provider and the Finnish Centre for Pensions have the right to have examined witnesses in a
District Court on their own initiative or on the request of the party involved in order to clarify a case
which is being processed.
Section 217
Disqualification
Notwithstanding the provisions of section 28(1)(4) and 28(1)(5) of the Administrative Procedure Act
(434/2003), an official or a member of the Board of the pension provider or the Finnish Centre for
Pensions may handle a matter relating to the implementation of this Act and which concerns an employer
who has arranged pension provision with the said pension provider or an employee working for such an
employer, or a self-employed person.
Section 218 (1097/2008)
Document storage
The pension provider and the Finnish Centre for Pensions shall store documents related to the
arrangement of pension provision pursuant to this Act or a pension matter as provided in the Archives Act
(831/1994). If the National Archives Service has not decreed that the said documents shall be stored
permanently, the pension provider or the Finnish Centre for Pensions shall store:
1) the insurance application, insurance policy and insurance contract as well as other necessary
documents relating to the taking out of insurance, the handling of the insurance and the determining of the
contribution for the period of validity of the insurance policy and the ten subsequent calendar years;
2) the application, medical statement, rehabilitation plan relating to a pension or rehabilitation matter and
other documents relating to rehabilitation or the pension applicant’s state of health, work and functional
ability or rehabilitation prospects, other documents necessary for awarding, processing or paying the
78
pension or rehabilitation benefits, as well as the decision and calculation relating to a pension or
rehabilitation matter for the insured person’s lifetime and the five subsequent calendar years;
3) the documents necessary for awarding, processing or paying survivors’ pension, as well as the decision
and calculation relating to the survivors’ pension for the period of payment of the survivors’ pension and
the five subsequent calendar years;
4) the documents necessary for the debiting of contributions up to the end of the debiting and the five
subsequent calendar years; and
5) appeal documents for 50 years, unless the documents are to be stored for a longer period by virtue of
paragraphs 1–4; the period of storage for documents relating to an appeal starts when the documents have
been returned to the pension provider or the Finnish Centre for Pensions from the appellate body.
Section 219
Entry into force
Separate provisions shall be issued regarding the entry into force of this Act.
HE 45/2005, StVM 5/2006, EV 20/2006
Entry into force and application of the amended provisions:
1121/2006:
This Act enters into force on 1 January 2007. Measures necessary for the implementation of this Act may
be undertaken before the Act’s entry into force.
When this Act enters into force, the equity linked buffer fund referred to in section 168(2) takes the value
zero. When calculating the annual change to the equity linked buffer fund, the values used, instead of onetenth, are the value 0.02 in 2007, the value 0.04 in 2008, the value 0.06 in 2009 and in 2010 the value
0.08.
HE 77/2006, StVM 31/2006, EV 152/2006
1274/2006:
This Act enters into force on 1 January 2007.
HE 197/2006, StVM 38/2006, EV 176/2006
1292/2006:
This Act enters into force on 1 January 2007.
HE 251/2006, StVM 49/2006, EV 237/2006
1314/2006:
This Act enters into force on 1 January 2007.
HE 167/2006, StVM 34/2006, EV 168/2006
79
1112/2006:
This Act enters into force on 1 January 2008.
Measures necessary for the implementation of the Act may be undertaken before the Act’s entry into
force.
HE 53/2007, StVM 13/2007, EV 69/2007
1164/2006:
This Act enters into force on 1 January 2008.
HE 95/2007, StVM 9/2007, EV 55/2007
1281/2007:
This Act will enter into force on a date to be defined by decree. (Act 1281/2007 entered into force 1
March 2008 in accordance with Decree 127/2008)
Measures necessary for the implementation of this Act may be undertaken before the Act’s entry into
force.
HE 115/2007, LiVM 13/2007, EV 111/2007
1363/2007:
This Act enters into force on 31 December 2007.
The calculation criteria under section 168(2) of this Act for the equity linked buffer fund are applied from
1 January 2007, however.
HE 138/2007, StVM 19/2007, EV 94/2007