Finland’s earnings-related pension assets rose above €300bn for the first time in the second quarter of 2026, as strong investment returns helped push the value of investable assets to a record high.

According to the latest figures from the Finnish Pension Alliance (TELA), investable assets in the earnings-related pension system reached €300.2bn at the end of June, an increase of €16bn during the second quarter.

Investment returns for the first half of the year were 6.2 per cent in nominal terms and 4.2 per cent in real terms after accounting for inflation.

TELA noted the returns were achieved despite a challenging investment environment earlier in the year, with market uncertainty and higher inflation weighing on conditions.

TELA chief economist, Mikko Mäkinen, said: “The consequences of the war in Iran, which began in February, accelerated inflation and increased uncertainty in the markets. However, the performance of key stock markets was strong in the second quarter, driven in particular by investments in AI.”

Equity and equity-type investments delivered the strongest returns during the first half, producing a nominal return of 9.1 per cent and a real return of 7 per cent.

Alternative investments returned 5.4 per cent in nominal terms and 3.2 per cent in real terms, while fixed-interest investments returned 1.7 per cent nominally and -0.3 per cent in real terms.

Mäkinen argued that the growth in pension assets would help strengthen the financing of future earnings-related pensions and reduce pressure on younger generations to fund higher contributions.

“Just over a fifth of the pensions paid in the private sector are currently covered by pension funds and their returns. With the recent pension reform, the importance of funds and investment returns in financing pensions will increase further,” he continued.

“The pension assets and their growth reduce the pressure on today’s younger generations to increase pension contributions in the future. Meanwhile, growing pension assets can strengthen confidence in the sustainability of the earnings-related pension system as the population ages and the birth rate remains low.”

However, Mäkinen highlighted that the benefits of pre-funding currently apply only to employees’ earnings-related pensions, rather than to pensions for the self-employed.

He noted that expenditure under Finland’s self-employed persons’ pension system, YEL, has exceeded contribution income for some time and has increasingly relied on government support, with the state contribution expected to reach around €600m this year.

Mäkinen argued that gradually introducing pre-funding to the YEL system could help improve its long-term financial sustainability, particularly as reform of the Self-Employed Persons’ Pensions Act progresses.

The figures also come after reforms to Finland’s private-sector earnings-related pension system entered into force in July, giving pension providers greater scope to take investment risk in pursuit of higher long-term returns.

TELA said this would allow pension providers to increase their exposure to equities.

Indeed, equity investments accounted for an average of 61 per cent of the risk allocation of earnings-related pension insurers at the end of June 2026, up from 54 per cent at the end of 2024.

Public estimates suggest the weighting could rise to around 70 per cent following the reform.

Urging caution, though, Mäkinen added that greater investment flexibility should be viewed from a long-term perspective, warning that higher risk could also lead to greater annual volatility.

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