Information technology (IT) costs for the Finnish pension sector increased by €8m in 2024, according to figures from the Finnish Pension Alliance (Tela), bringing an end to the downward trend in IT costs that the sector has seen in recent years.

In 2024, IT costs totalled €215m, higher than the €207m cost in 2023, and marginally higher than the €213m cost the sector faced in 2022, a survey compiled by Tela found.

Tela director, Mikael Kulikoff, said: “IT costs in 2024 were almost €8m, or 3.8 per cent higher than in 2023. There had been four consecutive years of declining IT costs, even though the overall cost level has risen over the same period.”

Tela attributed the recent downward trend in IT costs to ‘determined development efforts’ to reduce costs and the end of work following major legislative changes at the turn of the decade.

These included the previous pension reform, which came into force in 2017, and the introduction of the income register at the beginning of 2019. Over the past eight years, IT costs peaked in 2019 at €249m.

Information systems play a central role in all the activities of occupational pension insurers. The systems contain information on the current and former employment relationships, earned wages, and accrued and already paid occupational pensions of everyone working in Finland.

In 2024, there were nearly 2.7 million employees and self-employed persons covered by earnings-related pensions. In turn, there were 1.6 million occupational pension beneficiaries.

IT expenditure in the occupational pensions sector is monitored annually. Tela’s survey includes data from all private and public sector occupational pension insurers providing statutory occupational pension cover, as well as from the Finnish Centre for Pensions (ETK). The coverage of the survey is estimated to be around 99 per cent of the IT costs in the sector.

Maintenance of information systems and production management accounted for the largest share of total IT expenditure, or 68.3 per cent. Just under a third (29.5 per cent) of expenditure was on development investments. The need for changes due to legislative changes accounted for 2.2 per cent.

IT costs are mainly financed by annual occupational pension contributions, except for investment-related IT costs, which are financed by investment income. In 2024, investment-related costs amounted to €26.2m, and the costs covered by occupational pension contributions were €188.4m.

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