Average Finnish earnings-related pension system return hit 4.8% in 2020

The average investment return of the Finnish earnings-related pension system in 2020 was 4.8 per cent, according to the Finnish Centre for Pensions (ETK).

The positive return is despite a year dominated by the Covid-19 pandemic. In total earnings-related pension assets rose to €223bn.

At year-end 2020, the investment assets of the earnings-related pension system in Finland were divided as follows: 52 per cent in listed shares and share-like instruments (up by 2 per cent from 2019), 32 per cent in money-market investments and interest-bearing instruments, 9 per cent in real estate and 8 per cent in other investments (incl. hedge funds).

One fourth (25 per cent) of the investment assets were in domestic objects while slightly less than one fifth (17 per cent) were in objects within the euro area. The main part (58 per cent) of the earnings-related pension system’s investment assets were in objects outside the euro area.

“In the review period 1997–2020, the average return of the Finnish pension insurance investors has exceeded the baseline projections. A sufficient average long-term return improves solvency, thanks to which our pension system can weather crises on the financial markets,” ETK stated.

    Share Story:

Recent Stories

Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.