Several Finnish pension funds have published funding updates for their schemes, which revealed that a strong start to the year was undermined by global economic uncertainty following the impact of US tariffs.

Pension company Elo reported a negative investment return in the first quarter of 2025 of -0.4 per cent.

The market value of its investments also fell from €32.4bn at the end of 2024 to €32.1bn.

However, the firm said its cost efficiency improved, and operating expenses covered by the management cost component decreased by 2.8 per cent.

"When markets fluctuate and investment returns decline, we must remember that the pension company's investment activities are long-term and we diversify investments broadly while managing risks," Elo CEO, Carl Pettersson, said.

Meanwhile, the Finnish state pension fund VER reported a slightly positive return on investments of 0.6 per cent in Q1 2025, with its investment assets totalling €24.2bn.

However, the firm said the real rate of return during the first quarter was 0.1 per cent.

VER's five-year average real return was 4.8 per cent, and its ten-year real return was 2.7 per cent per year.

VER also noted that the state pension fund's role in equalising the government's pension expenditure continued to grow.

The state's pension expenditures totalled over €5.5bn in 2024, while the 2025 budget foresees an expenditure of nearly €5.6bn.

As VER contributes 42 per cent of these expenses to the government budget, the transfer to the 2025 budget will amount to over €2.4bn.

By the end of March, VER had transferred €0.6bn to the government budget.

Over the same period, VER's pension contribution income totalled €0.4bn, matching the forecast.

"Investment markets performed well at the beginning of 2025, raising expectations," VER's report reads, "before the debate on US tariffs started.

"Towards the end of March, there were growing concerns about the impact of potential higher tariffs on the global economy and stock markets.

"As a result of these factors, investment returns in the first quarter were only slightly positive. There were more uncertainties about economic growth than normal, and volatility in the investment market increased towards the end of the period," added the funding update report.

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