Statutory Earnings-Related Pension Scheme for Public Sector Employees

Julkisten alojen eläkelaki, JuEL

Coverage

Mandatory insurance

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

Voluntary insurance

No possibilities for voluntary insurance in this scheme.

Financing

General finances

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

Contribution rates

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

Taxation of contribution payments

Contributions are tax-deductible.

Administration

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

Qualifying Conditions

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

Benefits

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

Coverage

Financing

Administration

Qualifying Conditions

Benefits

Mandatory insurance

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

Voluntary insurance

No possibilities for voluntary insurance in this scheme.

General finances

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

Contribution rates

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

Taxation of contribution payments

Contributions are tax-deductible.

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

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

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

¹ The maximum age depends on the year of birth. Insurance obligation ends at age 68 for persons born before 1958, at age 69 for persons born between 1958 and 1961, and at age 70 for persons born after 1961.

² Persons aged 53-62 pay higher contribution shares (8.65%) than younger cohorts due to higher accrual rates (1.7% compared to 1.5% for younger cohorts). Age-specific accrual rates were implemented by the 2005 reform, but abolished by the pension reform of 2017. Transitional rules still apply until the end of 2025 after which accrual rates and contributions will be the same for all.

³ An extra expenditure-based contribution applies for some local government employers (due to higher pensions in payment according to old pension rights, corresponding to about 3.95% of local government wage sum; the total contribution revenue is about 28.35% for local government wage sum) and for the Evangelical-Lutheran Church (with higher contribution payments, about 29%).

Legal Basis: Public Sector Pensions Act 81/2016 (Julkisten alojen eläkelaki).