Finnish pension assets increased by €33bn in 2021, according to the Finnish Centre for Pensions (ETK).

The organisation said that the increase was particularly due to a “robust return” on pension providers’ investments, as well an increase in pension contributions.

Pension assets increased by 33 billion euros last year, particularly due to a robust return on pension providers’ investments. Pension contribution income also developed favourably due to the growing wage sum. Low inflation curbed expenditure.

Earnings-related pension expenditure (€31bn) exceeded revenue (€29bn) in 2021 while return on investments showed an exceptionally high value of €35bn. As a result, preliminary figures show that pension assets increased by €33bn and amounted to €258bn at the end of the year.

The investment markets showed strong profit in the second year of the coronavirus pandemic. The growth in pension assets was driven, in particular, by stock market profits, resulting in improved solvency for earnings-related pension providers.

The insured wage sum of wage earners grew by 5 per cent in 2021. The growth in wage sum and the end of the reduced contributions due to the pandemic increased the revenue of the earnings-related pension system by more than 2 billion euros from 2020.

The growth in expenditure slowed down temporarily, mainly as a result of the low inflation in 2020 via the earnings-related pension index. The reduced number of new disability pensions also curbed pension expenditure.

“The year 2021 reinforced pension financing in many ways. For example, private pension insurers collected around €6bn in their joint buffer of stocks; the average solvency exceeded 136 per cent. This is good as the pension expenditure is predicted to grow steadily in the coming years and there is great uncertainty in the state of the economy,” ETK actuarial manager, Jaakko Aho, said.

Pension system revenues for the private sector totalled €19bn and expenditures €20bn. Return on investment showed a profit of €22bn. The corresponding figures for the public sector were slightly less than €11bn in revenues and slightly more than €11bn in expenditures, with a profit of €13bn on investments.

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