An employee may retire, at the earliest, at the minimum retirement age for their own age group or from the beginning of any month thereafter. The employee’s current employment contract must be terminated in order for them to begin receiving old-age pension. It is important for the employee and the employer to make a clear agreement on the termination of the employment contract in a way that is in keeping with the notification practices of the workplace.
If, however, the employee has already reached the age when their insurance obligation ends (or if they hold a public trust position), their work does not have to end in order to begin receiving their pension.
You can check your maximum retirement age here.
Continuing to work alongside pension
If a new contract for the same employer is signed immediately after the termination of the previous employment relationship, the new contract must be substantially different from the previous one. All changes in the terms and conditions of the new employment relationship must be mutually agreed on by the employee and employer and specified clearly in the contract.
Such changes might be:
- a substantial reduction in working hours
- a substantial increase or decrease in pay
- a substantial change in work tasks.
Such a change must be considered substantial when considered objectively.
The employee must also be insured by TyEL for work done alongside pension until they reach the maximum age for mandatory pension insurance coverage if their earnings exceed the threshold for the obligation to insure.
Practical instructions
- When your employee is preparing to retire, agree on the exact date for the start of their pension.
- Please note that the current employment relationship must end before the pension can begin. Any accumulated holiday time must be taken as days off or paid as financial compensation prior to the start of the pension.
- The employee must submit their pension application about one month before their intended retirement. No information or measures are required from the employer at that point. If an employee needs help in clarifying the pension options or applying for their pension, our customer service is happy to help.
- The employer must report the employee’s earnings information to the Incomes Register. Also remember to indicate the end date of the employment relationship and the correct reason for termination (the start of the old-age pension). If, after the employment relationship has ended, the employee is retroactively paid wages for pay periods that were earned during the previous employment relationship, the termination date and reason must be entered in connection with each payment report. This will ensure that they are included in the calculation of the pension.