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 |
| 1958 | 0.95404 |
| 1959 | 0.94984 |
| 1960 | 0.94659 |
| 1961 | 0.94419 |
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 your target retirement age. The target retirement age indicates how long you need to defer retirement in order for the increment for late retirement to increase your pension as much as the life expectancy coefficient cuts it at the retirement age of your age group. The estimate of your target retirement age is specified in the year in which you (as an employee or a self-employed person) turn 62.
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.