Since 2003 it has been possible for government employees, when they become 61, to apply for partial pension. Partial pension means reduced working hours while SPV makes up for part of the loss of income this working hours reduction brings.
Conditions for partial pension
In order to be covered by the Partial Pension Agreement, employees must, prior to their applications, have been entitled to collective agreement-stipulated pension rights for a total of 120 months. If permitted by the employer, working hours may be reduced by up to 50% of full time employment for partial pension.
Compensation from SPV
The Partial Pension Agreement means that SPV pays the working hours reduction due to partial pension up to the equivalent of 60% of the partial pension base. The partial pension base is formed by the reduction in working hours multiplied by the employee’s pensionable salary.
If, for example, you have a full time position and you are granted 50% partial pension, you will work and receive salary for a 50% position, be a partial retiree for 50% and receive payment from SPV the equivalent of 60% of the half time salary you no longer receive from your employer. The result is that you will receive 30% of your previous full timer salary from SPV in the form of pension replacement so, as a monthly income, you have approximately 80% of your previous fixed salary (salary and pension replacement together).
Affect on future occupational pension
Partial pension does not affect your future occupational pension. According to the agreement, you are counted as working full time. Partial pension is, in other words, not an advance withdrawal or a weakening of your pension base. Payments to the defined contribution occupational pension are made as if the partial pension had not been taken.
Affect on future retirement pension
Partial pension does affect your national retirement pension as partial pension is not counted as pensionable income. Your national retirement pension may, consequently, be reduced if you take out partial pension.
Remaining employed after 65
Partial pension does not affect opportunities to remain as an employee after the age of 65 and if this is the case, the employee returns to the same amount of working hours as before his/her partial pension. Partial pension is not possible after the age of 65.
Local applications of the Partial Pension Agreement
The aim of the Partial Pension Agreement is to enable transfer of competence and assist employees to be able to remain at work until the normal retirement age. Different universities conclude that they have different preconditions and competence needs as concerns the granting of partial pensions, consequently the situation may vary from university to university. If you have any questions concerning partial pension at your university please contact your local union representative.