The earnings-related pension indexes ensure that the starting level of your pension is reasonable and that the purchasing power of the pension you are paid remains intact. The earnings-related pension index and the wage coefficient protect earnings-related pensions.
All earnings-related pensions in payment are adjusted annually at the beginning of January with the earnings-related pension index (also called the pensioner’s index). The earnings-related pension index ensures that the purchasing power of pensions remains intact or is improved.
In the earnings-related pension indexes, the change in price levels weigh 80 per cent and the change in wage-earners’ income levels weigh 20 per cent.
The wage coefficient ensures that the pension you have accrued during your working life retains its value. When you start drawing your pension, the pension provider indexes the wages and earnings that you have received during your working life with the wage coefficient to the level of the year when you start drawing your pension.
When your pension starts, your pension provider will index multiply your wages and income from self-employment throughout your working life with the wage coefficient to adjust them to the level of the year when you start drawing your pension. In the wage coefficient, the changes in prices weigh 20 per cent and the changes in wage-earners’ income weigh 80 per cent.
Each year, Kela adjusts the national pensions in payment at the beginning of January according to changes in the national pension index. The indexation secures the purchasing power of national pensions in relation to changes in price levels. In addition to index adjustments, the level of the national pensions have been adjusted from time to time with a parliamentary decision.
The amount of the index adjustment depends on the changes in the consumer price and earnings level indexes calculated by Statistics Finland.
|Pension indexes 2017–2019|
|Earnings-related pension index||2585 (change 1,5 %)||2548 (change 0,55 %)||2534 (change 0.6%)|
|Wage coefficient||1.417 (change 1,9 %)||1.391 (change 0,14 %)||1.389 (change 1.2%)|
|National pension index||1617 (change 0.0%)||1617 (change -0.9%)|