Finnish earnings-related pension providers’ solvency ratio rises to 133.8%

Finnish earnings-related pension providers’ solvency ratio increased to 133.8 per cent in Q2 2021, according to the Financial Supervisory Authority (FSA).

The solvency ratio of the relevant providers is calculated by dividing pension assets by technical provisions.

In Q1 2021, at the end of March, the solvency ratio stood at 131.9 per cent.

Therefore, the solvency ratio increased by 1.9 percentage points to reach 133.8 per cent at the end of June 2021.

The pension insurance companies’ average solvency ratio was 133.3 per cent, while that of company funds and industry-wide funds was 151.2 per cent.

The FSA’s report defines earnings-related pension providers as comprising private-sector pension insurers, such as pension insurance companies, company pension funds and industry-wide pension funds.

Solvency details the pension providers’ capacity to bear risks, and the regulations only pertain to private-sector insurers.

These providers’ solvency is measured by determining their assets that exceed technical provisions, and if the assets invested exceed the technical provisions by a sufficient margin, the provider is solvent.

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