Financing and Investments

In Finland, statutory earnings-related pensions are financed mainly by the pension contributions paid each year. However, part of the pensions are financed with funded assets and returns on funds. Employers, workers and self-employed persons pay statutory earnings-related pension contributions. Part of the earnings-related pension contributions are funded into funds governed by earnings-related pension providers. They are under obligation to invest the assets profitably and prudently and to finance an agreed share of the pension from their own fund.

The earnings-related pension is granted and paid by the earnings-related pension provider in which the worker was last insured before retiring. In the cost division carried out by the Finnish Centre for Pensions, the shares of the expenses for paid pensions that are the liabilities of the various actors are sorted out.

Money flows

The earnings-related pension system’s assets increased in 2021 with 33 billion euros. Total assets at year-end were 258 billion euros.

The increase in the assets are based on the investment profits. Due to the good investment markets, the return on investments was 35 billion euros in 2021. Income was 29.1 billion euros and costs 30.9 billion euros.

Statistics on money flows

Financing principles

Statutory earnings-related pensions are financed mainly through the pay-as-you-go (PAYG) system, that is, the earnings-related pension contributions paid in the year in question. Part of the pensions are financed under the partial funding principle by using both earnings-related pension contributions and previously accumulated funds.

Financing principles of earnings-related pensions

Long-term projections (LTP)

The long-term projections project the future of the pension system, 60–70 years. The projections, which focus on statutory pensions, are published every two to three years.

Long-term projections

Earnings-related pension contributions

In Finland, earnings-related pensions are financed mainly by earnings-related pension contributions paid by employers, workers and the self-employed. Check the valid contribution rates.

Earnings-related pension contributions

Statistics on earnings-related financing

The Finnish Centre for Pensions produces time series from the financial statements of the pension providers. The pension providers deliver also figures to the cost division. The financing of pension tables are published yearly in The Finnish Centre for Pensions statistical database.

Read more on the financing statistics website