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.

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