On Oct. 27, FIN STM confirmed the indexes for occupational pensions.
FIN STM confirmed the new Earnings Pension Index and Salary Coefficient for 2024, which have been introduced via Decree STM/2023/117 of SWE STM, on Oct. 26, 2023.
Earnings Pension Index
The earnings-related pension index will be 3037 for 2024 and the earnings-related pension index will increase by approximately 5.7 per cent compared to 2023.
Occupational pension index checks occupational pension contributions. calculating the pension index, the share of change in wages is 20% and the change in prices is 80%.
Earnings and survivors' pensions in payment according to private sector employment pension laws, and earnings and survivors' pensions in payment in public sector pension systems, are all tied, with some other benefits, to the earnings-related pension index.
In accordance with occupational pension index, the compensation under the State Civil Service Act, compensation in payment according to Motor Insurance Act, the Patient Insurance Act and the Environmental Damage Insurance Act, are also affected by this.
Salary Coefficient
The salary factor or occupational pensions was confirmed as 1.637, and compared to 2023, the wage factor will be increased by approximately 5.1% for the 2024 figures.
The salary coefficient that is used in the calculation of the future occupational pension.
It checks the annual earnings to level of the year pension began, and for the wage coefficient, the share of the change in wages is 80% and the change in prices is 20%.
The salary coefficient is used to check earnings that are the basis of pension and the income limits stipulated in employment pension laws to level at the time of calculation.
In addition, when calculating other pension to be paid after the partial early retirement pension or last pension portion of partial early retirement pension, pension portion of basis of partial early retirement pension not yet granted is linked to salary coefficient.
The salary coefficient is used in determining the minimum amount of care allowance and the premium according to the Family Care Act, in checking the various salary limits regulating the gradation of unemployment insurance contributions of employers.
Also, employer's unemployment insurance deductible, as well as in checking the salary limits regulating gradation, and amounts as stipulated in Unemployment Insurance Act.
The salary coefficient is also used to check the calculated income according to pension compensation paid from state funds for care or study of a child under the age of three.
Also, amounts of money under Occupational Accidents and Occupational Diseases Act, the Act on Compensation for Accidents and Service Illness in Crisis Management Tasks.
The salary coefficient is also used in determining annual earnings that are the basis for compensation for loss of earnings and survivor's pension, under various legislation.
Effectiveness
The various terms of the new Decree will now all come into force as from Jan. 1, 2024.
Oct. 2024 Figures for 2025 Published
On Oct. 28, 2024, FIN STM confirmed the indices for occupational pension security for the year 2025, as salary coefficient and occupational pension index are revised yearly.
Regulation containing the indices, numbered STM/2024/120, was dated Oct. 24, 2024, while the Decree setting out the specific indexations figures, is dated Oct. 28, 2024.
Occupational pension index checks paid occupational pensions, and salary coefficient is used in calculation of future occupational pension, by checking wider annual earnings.
The earnings-related pension index will be 3077 next year, while the earnings-related pension index will increase by approximately 1.3 percent when it is compared to 2024.
When calculating the occupational pension index, the share of the change in wages is 20 percent and the change in prices is 80 percent, forming the basis of the calculation.
At end of 2023, average pension of those receiving old-age pension as an occupational pension was 1,885 euros per month, so index increase would be 25 euros per month.
The salary factor was confirmed as 1.673, and compared to 2024, the wage factor will now increase by approximately 2.2 percent overall, based on all the calculated figures.
In wage coefficient, share of change in wages is 80% and the change in prices is 20%.
This new regulation setting the relevant indices will now enter in force on Jan. 1, 2025.
