The Finnish Pension Alliance (Tela) has warned that the country’s €270bn occupational pension assets cannot be turned into a domestic risk fund, stressing their statutory role is to secure pensions through sustainable returns.

In a blog post, Tela head of legal affairs, Tiina Satti, pushed back against recent suggestions that occupational pension funds should be used to support national growth projects.

“The investment of pension assets is primarily driven by the objective of maintaining the sustainability of the pension system. According to the law, funds cannot be invested on the basis of other considerations,” she said.

At the end of March 2025, occupational pension insurers had invested €51bn, or 19 per cent of assets, in Finland, and held 7.2 per cent of the market value of the Helsinki Stock Exchange at the end of last year.

Proponents of steering more pension capital domestically argue that Finnish growth companies struggle to access finance.

However, both the Growth Task Force report, led by Risto Murro, and the Ministry of Finance’s Financial Sector Growth Strategy concluded earlier this year that while gaps exist, the supply of capital is not a major concern.

Tela head of analysis, Jari Sokka, said the problem lies instead in the lack of investor appeal.

“Occupational pension insurers are happy to invest in domestic assets if returns are expected,” he noted.

Almost a quarter of pensions are paid annually from investment income. Tela warned that if funds had been concentrated in Finland in recent years, returns would have been significantly weaker, undermining the system’s financing.

“The geographical diversification of assets is about managing risk,” Sokka said.

“Capital from occupational pension funds does not flow abroad – it goes there for returns. By investing abroad, we can make the growth of other countries benefit the financing of Finnish pensions.”

A broader pension reform is underway in Finland that would allow occupational pension providers to take on more investment risk. It is hoped this will improve returns and strengthen the long-term sustainability of the system.

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