Old-age pension

Payments from pension funds can affect social security rights. Interaction with the social security system can be very complicated since pension payments and financial income can reduce payments from the social security system.

For further information on rights of the social security system, contact the Social Insurance Administration. 

Earned rights are preserved for the fund or funds you have paid into. When the time comes for pension payments, you must apply for them.

While this varies somewhat between funds, the general rule is that you can begin drawing your pension between the ages of 62 and 70. In some instances, pension payments are allowed even earlier, i.e., at age 60. The pension will then be paid monthly in equal amounts for the rest of your life. While the reference age may vary between the pension funds, most of them use 67 years of age as their reference.

It is possible to bring forward or postpone the payment of a pension, most often as of 62 years of age, while several funds provide no upper limits on the age limit how long the payment of the pension can be postponed. The monthly payment will decrease or increase, depending on whether pension payments begin earlier or later. If a fund member starts pension payments earlier, he/she will receive a lower payment per month during a presumably longer period. However, if he/she postpones payments of a pension, he/she will receive higher monthly payments for a presumably shorter period.

Thus, how long a fund member lives determines whether it is an advantage or a disadvantage to start receiving pension payments earlier or later.

Your rights in pension funds are decided by the contributions you have paid into them during your working life.

The social security system ensures a minimum pension for everybody.

All working individuals are obligated to be members of a pension fund and pay into it a specific percentage of their wages.

Wage payers make a matching contribution for each worker to these pension funds. In case an individual has paid very little or nothing into a pension fund, the social security system accepts the responsibility through higher payments.

Further information on social security is to be found on the website of the Social Insurance Administration.

Yes, it is possible to divide old-age pension rights, but not disability pensions, surviving spouse pensions and child allowances. The division of pension rights applies only to those who are currently or have been in legal or common-law marriage. Such division of pension rights shall involve a mutual division which is commensurate, i.e. each party to a legal or common-law marriage shall grant the other party rights equal to their own. Therefore, both parties need to divide their pension rights.

It is permitted to assign to the other party up to one half of pension rights

No, pension fund payments do not depend on anything except a fund member’s paid contributions into pension funds. 

No. The rights  which you have acquired through payments into pension funds will not decrease even if you receive other income after your retirement, e.g., wages, financial income or rental income.

On the other hand, other income can affect payments from the social security system. All income comes into play, including payments from pension funds. Payments from pension funds may reduce payments from the Social Insurance Administration, further information.

Yes, you must apply for a pension from the pension funds. In the event a fund member has the right to a pension, it is sufficient to apply for a pension to the pension fund into which a contribution was paid last or to the fund in which the fund member has the most rights. The fund will then forward the application to the other funds.