Finnish earnings-related pension provider, Elo, generated a return of 7.8 per cent in the first half of 2021, equating to €2,007.5m.

Publishing its half-year results, the provider said the market value of its investments at the end of June was €27.8bn. The solvency ratio was 126.6 per cent and the solvency capital was 1.6 times the solvency limit.

“Investments generated good returns in the first half of the year and Elo’s solvency improved further. The economic recovery was reflected in growth in the total payroll amount paid by customers starting from the spring,” Elo CEO, Hanna Hiidenpalo, said.

The strong performance of the financial markets contributed to the positive return in the first half. Elo’s equity investments returned 15.2 (-9.7) per cent, fixed-income investments 0.6 (1.2) per cent, real estate investments 2.0 (0.7) per cent and other investments 7.0 (0.8) per cent.

The result of investment operations at fair values was €883m (€-1,070.1m H1 2020). During the period under review, the highest returns were generated by private equity fund investments, listed and unlisted equities.

In terms of applications for pensions, it said those for old-age pensions and partial early old-age pensions have remained stable compared to the previous year. By contrast, new disability pensions at Elo declined by 13 per cent year-on-year. A total of 3,042 (3,489) new disability pension decisions were issued in the first half of the year. The total number of disability pension decisions issued was 6,046 (6,629).

“There are several reasons for the decrease in new disability pension decisions. Some of them are related to Covid-19, such as delays in getting a diagnosis when access to care has been delayed. It is hard to predict what impact the changes in people’s behaviour and health caused by the pandemic will have in the long run,” Hiidenpalo explained.

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