If employment ends before retirement age

For wage-earners, pension accrues on their earnings from employment. Usually, the earnings that accrue pension are the same as the salary that is subject to withholding tax. If you lose your job, register yourself as an unemployed jobseeker at the TE office no later than on the first day of unemployment because you will receive the unemployment allowance only if you are registered as a jobseeker.

If your work employment ends, your pension accrual on earnings from employment ends. Pension accrues for wages paid for the statutory notice period regardless of whether you work or not. However, pension does not accrue for any severance pay or corresponding compensation for ending employment.

Since 2005, pension has also accrued on many benefits received during unpaid periods. The condition for accruing pension is that you have earned at least EUR 20,571.69 (in 2024) during your career.

For earnings-based daily allowance periods, pension accrues until the minimum pensionable age for old-age pension, but the level is somewhat lower than for periods of work. When calculating pension, 75% of the earnings basis is taken into account. The accrual percentage is 1.5%. Pension does not accrue on the basic unemployment allowance or labour market subsidy paid by Kela.

Partial old-age pension or surviving spouse’s pension do not affect unemployment allowance. However, no pension accrues on the earnings-based daily allowance period if you receive partial disability pension.

You can draw 25 or 50% of your pension as partial old-age pension already before reaching the pensionable age for old-age pension. The age limit for partial old-age pension is 61 years. This pension is possible if you have not been granted any other type of earnings-related pension. Voluntary pension paid by your employer does not prevent you from receiving partial old-age pension. Working while on pension is not required or limited. Unemployment has no effect on partial old age pension, nor does partial old-age pension have an effect on unemployment allowance.

If you have not yet reached the age limit for old-age pension and your work ability has deteriorated considerably due to an illness, handicap or injury for a longer time, you might be entitled to vocational rehabilitation or disability pension. You might also be entitled to years-of-service pension, if you have turned 63 and have performed strenuous work for at least 38 years or have stopped performing such work less than a year ago.

The daily unemployment allowance will secure your livelihood for no more than 500 days, i.e. approximately two years. Unemployed persons approaching their pensionable age can receive the daily allowance for a longer period of time, for so-called additional days. The right to additional days in completely removed for those born in 1965 and after. Entrepreneurs are also not entitled to additional unemployment allowance days. For further information on earnings-based daily allowance, please contact your unemployment fund.

You can see the amount of pension you have accrued in your pension record in Varma’s online service. You will be able to see the pension accrued from the earnings paid during the period of layoff and unemployment in your pension record at the latest in spring of the year after the benefit was received.

You can also calculate a new estimate of the amount of your future pension by selecting ‘Pension estimates’. Select old-age pension and a retirement starting date. You can add ending date of your employment.

Read more information in our brochure Pension cover for the unemployed 2023 (pdf)

For further information on earnings-based daily allowance, please contact your unemployment fund or the Federation of Unemployment Funds in Finland, and Kela for information on the basic unemployment allowance.

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