The Finnish earnings-related pension index is likely to grow “slightly more” than the wage coefficient in 2024, the Finnish Centre for Pensions (ETK) has forecast.

As a result, a person who retires on an earnings-related pension before the end of 2023 may receive a slightly higher index increment than a person who retires after the turn of the year.

The effect is similar for the partial old-age pension, ETK noted.

There are two indexes that affect earnings-related pensions: The earnings-related pension index and the wage coefficient.

The aim of the earnings-related pension index is to retain the purchasing power of pensions in payment, while the wage coefficient affects starting pensions and brings the pensioner’s career earnings up to the level of the year of retirement.

ETK noted that the significance of the indexes varies per person depending on, among other things, working life, employment state and already accrued pension.

ETK economist, Timopekka Hakola, explained that delaying retirement was financially more profitable than hunting for benefits and indexes, as postponing retirement increases the earnings-related pension via the increment for late retirement and pensions continue to accrue during employment.

While last year’s earnings-related pension index was “exceptional”, Hakola did not believe this year’s index was going to be on the same level.

“Last year, the gap between the earnings-related pension index and the wage coefficient was 3 percentage points,” Hakola continued.

“This year, it will be much narrower. It would appear to remain at less than one percentage point.

“In light of the economic outlook, wage trends are narrowing the rising consumer prices.”

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