The retirement age continues its rise for a new age group. All pensions in payment are increased with a record-high earnings-related pension index. The confirmed income for the self-employed will be determined more specifically and adjusted regularly.
A new age group reaches its retirement age
The retirement age rises again with three months for a new age group. For those born in 1959, the retirement age is 64 years and 3 months.
Record-high earnings-related pension index
The earnings-related pension index raises earnings-related pensions in payment with around 6.8 per cent in 2023. The increase applies to all earnings-related pensions, that is, the old-age pension, the partial old-age pension, the disability pension and the cash rehabilitation allowance, the survivors’ pension (surviving spouse’s pension and orphan’s pension), the years-of-service pension and the vocational rehabilitation allowance. For example, an earnings-related pension of 1,500 euros per month in 2022 will rise to 1,602 euros per month as of January 2023.
The accrued earnings-related pension is also adjusted with the wage coefficient.At the time of retirement, the wage coefficient adjusts career lifetime earnings to the level of the year in which the pension begins. In 2023, the wage coefficient is around 3.8 per cent.
Life expectancy coefficient reduces starting pensions
When a pension starts, it is adjusted with the life expectancy coefficient. In 2023, the life expectancy coefficient is 0.94419. The confirmed life expectancy coefficient reduces starting old-age pensions under the earnings-related pension acts by 5.581 per cent. This reduction applies to starting old-age pensions of persons born in 1961 who retire in 2023 or later. The effect of the life expectancy coefficient can be offset by working longer.
The life expectancy coefficient affects also disability pensions, survivors’ pensions, partial old-age pensions and years-of service pensions that are granted in 2023.
The definition of confirmed income under YEL becomes clearer
As of the beginning of 2023, the Self-employed Persons’ Pensions Act is amended: the relevant change is that the definition of the confirmed income under YEL becomes clearer. In the future, the confirmed income will be adjusted regularly.
The grounds for the confirmed income remain unchanged. Also in the future, the confirmed income must correspond to the wage that would be paid to a person hired to do the work of the self-employed person. The YEL income level of a self-employed person is determined in the same way by all pension providers.
The YEL pension insurer makes an overall assessment of the confirmed income, which is affected by the median wage, the value and amount of the work input, the scope of the operations and the professional skills of the self-employed person. The self-employed can provide additional information on their own work input and self-employment.