Global pension funds achieved an average return of 5.3 per cent in 2025, according to analysis by the Finnish Centre for Pensions (ETK).

However, the analysis of 23 pension funds’ annual returns from across the globe found that returns varied significantly.

For example, the Dutch Pension Fund for Healthcare and Welfare (PFZW) ranked as the worst performer with a loss of -6.5 per cent in the year. Denmark’s ATP also saw its real return fall into the negative with a return of -5.3 per cent.

“Both PFZW and ATP suffered from the rise in long-term interest rates. These pension investors share a strong emphasis on bonds in their portfolios. When long-term interest rates increase, the value of bonds declines,” ETK special adviser, Antti Mielonen, stated.

In contrast, the South Korean public sector pension fund, NPS, achieved a real return of 16 per cent.

“The Korean stock market soared last year. For example, Samsung’s share price more than doubled, driven by the artificial intelligence boom and strong demand for memory chips,” ETK liaison manager, Mika Vidlund, said.

Despite its reputation for strong performance, Norway’s Government Pension Fund Global (GPFG) achieved a real return of 2.7 per cent last year.

“The GPFG's equity investments, with a strong emphasis on the United States stock market, generated positive returns. However, this time, the weakening of the dollar reduced those gains,” Vidlund explained.

Analysis of pension funds in ETK’s home country found that Finnish investors performed well in the comparison.

Veritas came out top with a return of 8 per cent, while Ilmarien posted a return of 7.9 per cent, Varma achieved a 7.3 per cent return, and Elo reported a return of 7.2 per cent.

“The robust rise of the Helsinki Stock Exchange, combined with inflation remaining close to zero, significantly supported the real returns of domestic pension investors,” Mielonen explained.

Looking over the longer term, however, ETK found that the average real return for pension investors (after costs) has been around 4 per cent over the past 10 years (2016–2025).

When looking over 15 years (2011–2025), the average real return was nearly 5 per cent. Norway’s GPFG stood out with the highest long-term real return, reaching 8.1 per cent.

The weakest performer was Denmark’s ATP, with a 15-year real return of 2 per cent.

---