Finnish govt sets earnings-related pension index at 2691 for 2022

Finland’s Ministry of Social Affairs and Health has set the earnings-related pension index at 2691 for 2022.

This is up from 2631 in 2021 an increase of around 2.28 per cent. The index adjustment amount is affected by changes in the consumer price and income level index calculated by Statistics Finland. In the earnings-related pension index, the share of change in price level is 80 per cent and the share of wage earners' income level is 20 per cent.

In addition, the wage coefficient was set at 1.501 an increase of 2.46 per cent on 2021’s figure of 1.465. This is used to calculate the future earnings-related pension as the pension provider uses the wage coefficient to adjust the insured’s wages and income from work during their working life to the level of the year in which the pension starts.

The Finnish Centre for Pensions (ETK), explains on its website that the purpose of the pension index adjustments is to ensure that a person retiring gets a starting pension that is reasonable considering the income level while still working and to ensure the future purchasing power of the pension in payment.

The pension provider adjusts the earnings-related pension in payment annually, at the beginning of January, according to changes in the earnings-related pension index. Indexation with the earnings-related pension index secures and even improves the pension’s purchasing power.

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