A new calculator has been published for people who are planning to use family leave. With the calculator, they can assess how family leave periods of different lengths would affect their future pension and compare their pension accrual during family leave with what they would earn as pension if they worked the same period. The calculator, provided by the Finnish Centre for Pensions, is part of a project promoting gender equality in pensions. A link to the calculator will appear on Kela’s site on benefits for families.
Parents taking family leave will earn pension benefits for the period they receive maternity, paternity or parental allowance or child home care allowance. With the calculator, they can determine the best way to divide family leave periods between them depending on the effects on their pension. Both parents calculate their own future pension.
“Parents earn pension benefits during their maternity, paternity or parental leave almost the same way as when they are working, but long periods of child home care allowance will have a negative pension impact,” says Senior Advisor Suvi Ritola from the Finnish Centre for Pensions.
Parents will earn earnings-related pension during their maternity, paternity or parental leave based on their income so that the annual income that was used to calculate their allowance amount is raised by 21 per cent. Parents receiving child home care allowance have earned state-funded pension benefits since 2005. Their pension will accrue based on a fixed amount, i.e., EUR 757.14 per month at 2020 level.
The calculator is available in Finnish, Swedish and English.
Unequal sharing of family leave widens the gender pension gap
The project promoting gender equality in pensions aims to generate discussion on the gender pension gap. Another aim is to increase peoples’ and decision-makers’ awareness of the underlying reasons. While the unequal sharing of family leave creates differences in pensions, there are also other factors behind the gender pension gap.
The project is led by the Ministry of Social Affairs and Health in cooperation with the Finnish Centre for Pensions, the Social Insurance Institution of Finland (Kela) and the Finnish Pension Alliance TELA. The project has received funding from the Rights, Equality and Citizenship Programme of the European Union (2014–2020).
The Ministry of Social Affairs and Health is now preparing a family leave reform under Prime Minister Marin’s Government Programme.
Calculate how your family leave affects your earnings-related pension (Tyoelake.fi/en/)
Kela’s site on benefits for families (Kela.fi)
Project: Promoting gender equality in pensions (stm.fi)
Family leave reform (stm.fi)