Investment Allocations, Realized Returns and Solvency Ratios
The Finnish pension investment assets amounted to 238 billion euros at year-end 2022. The private sector accounted for 150 billion euros. Approximately 55 billion euros, or 23 per cent, of the investments at year-end 2022 were invested in Finnish instruments. On the other hand, 17 per cent was invested in other countries in the euro zone and 60 per cent elsewhere. Countries outside the euro zone include the other Nordic countries, Great Britain, Switzerland, the United States, and the developing markets.
The website of the Finnish Pension Alliance TELA contains more statistics on asset allocation per investment type and area.
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Return on investments
The return on pension asset investments can be monitored based on the rate of return, for example, by type of investment.
Private sector investment allocations come with lower risks, which means that the return fluctuation is also smaller than in the public sector. The main reason for the lower risk in the private sector are the solvency regulations, which do not exist in the public sector.
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Solvency ratios
The solvency of an earnings-related pension provider requires that the pension provider has a sufficient risk-bearing capacity. A high return and a low risk level are generally contradictory goals, so higher investment returns come with higher investment risks.
The solvency ratio of a pension provider is calculated as the ratio between the pension assets to its technical provisions. This ratio varies greatly from one pension provider to another.
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