Pension from Bits

Kuvituskuvassa yrittäjä Nathalie Mutka

When Nathalie Mutka began her French and English studies at the University of Jyväskylä, she had no idea she was going to end up running her own business. Before becoming self-employed, she had accrued pension for employments in Finland and Great Britain. Now Nathalie pays pension contributions under the Self-employed Persons’ Pensions Act.

As a native Finnish and French speaker, it felt natural for Nathalie to major in languages at the university. After five years of study and only the master’s thesis left to do, she went to Great Britain with the Erasmus exchange student programme.

She stayed abroad for six years. Finding an IT sales job in London was no problem for a young woman fluent in many languages. At the same time, she accrued pension.

Pension accrues differently in different countries

– At the time, private-sector employees in Britain could save for a pension and have the employer match the saved amount.

When Nathalie returned to Finland in 2001, she transferred her private pension insurance accrued in Britain to a Finnish insurance company.

– In the economic turmoil at the turn of the century, a Finnish insurance company felt more reliable and stable.

Back in Finland, Nathalie was employed for four years within the publishing and IT field. During this period, she accrued pension under the Employees Pensions Act. She also discovered that she had returned from abroad to a very small employment market.

– I wanted to have a say in my own life and have a more independent job. The alternatives were limited, so it made sense to start my own business.

Kuvituskuvassa yrittäjä Nathalie Mutka

​​​Confirmed income underlying pension and daily allowance

In 2006, after graduating as a massage therapist, Nathalie started her own massage parlour, Hierontamutka, and jumped straight from employment to self-employment. Over the years, she has accrued a reasonable pension thanks to the contributions she has paid under the Self-employed Persons Pensions Act.

– The contributions have been a huge expense for me, since I paid approximately EUR 600-700 per month for nine years. You accrue pension only by paying your contributions, though. Even if the contributions seem high, having security as a self-employed person is important. Three times in nine years I have received a sickness allowance for a number of days.

At the beginning of 2015, Nathalie felt that she was no longer able to estimate her income as accurately as before. As a result, she lowered her confirmed income from work.

– After lowering my income from work, I had to fairly quickly raise it again, to EUR 12,326, since that is the lowest amount entitling to a basic daily allowance.

The self-employed can temporarily cut down their contribution by 10-20 per cent. This flexibility does not affect their confirmed income from work, nor the sickness or basic daily allowance that is based on the confirmed income.

– In the end, however, the 10-20 per cent flexibility is quite small. If your income suddenly drops by half, the flexibility may not be enough. I wish the Self-employed Persons’ Pensions Act would allow for more flexibility. As it is now, the contributions of a self-employed person may be distrained if the income from work suddenly drops. Right now, I’m doing well, and I intend to raise my confirmed income to its previous level as soon as my employment situation becomes stable. I wish the Self-employed Persons’ Pensions Act was made more flexible, though, so that it would better serve the self-employed.

Kuvituskuvassa yrittäjä Nathalie Mutka

Taking a degree is an opportunity

After the 2017 pension reform, Nathalie’s retirement age will be 65 years and 9 months. If she were to find herself unable to carry on in her current profession, she can always complete her master’s thesis and graduate with an academic degree. She would accrue pension also for her studies.

– I would need a basic livelihood while working on my theses. I’d rather earn my living and pension by working.

Photos: Karoliina Paatos

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