The solvency ratio of Finnish earnings-related pension providers declined by 2.4 percentage points over the first three months of 2022, the Financial Supervisory Authority (Tela) has revealed.

In the previous review, at the end of 2021, the solvency ratio, which is calculated by dividing pension assets by technical provisions, was 136.3 per cent.

However, the data up to the end of March 2022 showed that the ratio had lessened to 133.9 per cent.

The authority found that pension insurance companies’ average solvency ratio was 133.4 per cent, while that of company funds and industry-wide funds was 150.2 per cent.

Varma had the highest solvency ratio of any of the pension insurance companies included at the end of 2021, overtaking Ilmarinen who had held the top position at the end of 2020.

Both pension insurance companies were found to have an increased ratio over 2021 as Ilmarinen’s rose from 130.2 to 136.7, but Varma’s ratio increased at a higher rate, from 129.3 to 139.4.

The data also included the solvency ratio for every year since 2002, detailing the most significant downturn in the ratio was in 2008 when the global financial crisis had its strongest impact on pension assets.

It then went onto detail that the sharp decline in the net asset value of investments at the time also led to a reduction in the market value of earnings-related pension assets.

Share Story: