The solvency ratio of Finnish earnings-related pension providers remained at 129.3 per cent at the end of 2024, data from the Finnish Financial Supervisory Authority has revealed.

This is in line with the solvency ratio recorded in the previous quarter, and marks a slight year-on-year improvement, up from 126.7 per cent at the end of 2023.

The data showed that solvency capital had increased by €5.4bn in 2024, and whilst the solvency limit rose at a slightly higher rate than solvency capital during the fourth quarter, the solvency position remained at the level in the previous quarter.

According to the authority's data, the employee pension sector’s return on investment in 2024 was 9.1 per cent.

In particular, the return on equity investment was 13.7 per cent, whilst return on fixed-income investment 4.7 per cent, and that of other investment 9.5 per cent.

In the employee pension sector’s investment allocation, the weight of equities reached in Q4 also hit a record high level, at nearly 53 per cent.

The return on real estate investments was negative, however. Indeed, broader industry updates from Finnish pension providers previously revealed that whilst the industry had achieved "strong" investment returns in 2024, this was a "challenging" time in the real estate investment market.

According to the update, the employee pension sector's risk-bearing capacity against a decline in share prices also weakened slightly in Q4 due to higher risk-taking, although the authority clarified that this still remained at a "reasonable" level.

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