Adjusting pensions to rising life expectancy

People are living longer, and this means we have greater life expectancy. Greater life expectancy has to be accounted for when calculating pensions. People have to be encouraged to work longer. Pension managers adjust pensions to account for this by multiplying your pension amount by a number called the life expectancy coefficient.

The life expectancy coefficient is determined for each age group at age 62. It will be permanently applied to the pension payments you get.

Your birth  year Life expectancy coefficient
1947 1.00000
1948 0.99170
1949 0.98689
1950 0.98351
1951 0.97914
1952 0.97552
1953 0.97200
1954 0.96800
1955 0.96344
1956 0.96102
1957 0.95722

Pension on pension record adjusted with life expectancy coefficient

The pension amount stated on your pension record has been adjusted with the life expectancy coefficient. The Finnish Centre for Pensions projects the coefficients based on Statistics Finland’s population forecasts.

Five years before you reach your retirement age, your pension record will include an estimate of  when the effect of the life expectancy coefficient has been offset by the increase to your pension due to late retirement. This later retirement age is called your target retirement age.

Life expectancy coefficient and disability pensions

The life expectancy coefficient is also applied to disability pensions, but to a more limited degree. The coefficient is applied to the pension you have earned up to the time of retirement, but it is not applied to the projected pension component, that is, the computational pension you earn from the time of your retirement on a disability pension to when you reach your retirement age.

The life expectancy coefficient confirmed for the 62-year-olds in the year in which you retire on a disability pension will be applied to your disability pension.

The life expectancy coefficient is applied only once. When your disability pension becomes an old-age pension, the coefficient is not applied again.