In addition to pension contributions charged from employers, employees and the self-employed, earnings-related pensions are also financed through payments into the earnings-related pension scheme from unemployment insurance contributions, state shares and earnings-related pension assets as well as investment profits from said assets.

Employers disburse pension contributions based on the earnings of their employees to their own pension providers, who use them to finance earnings-related pensions currently on their responsibility and, on the other hand, prepare for the payment of future pensions by funding payments. The self-employed and farming entrepreneurs pay their own pension contributions directly to the pension provider.

The Employment Fund compensates the pension providers for costs arising from employees’ unemployment and training allowances and pension accrual based on alternation leave. All pension providers participate in the costs arising from accrued pension shares from unsalaried periods of allowance. Additionally, the State reimburses the pension providers for benefits paid during periods of study and periods of child-care.

The earnings-related pension system’s assets decreased in 2022 with around 16 billion euros. Total assets at year-end were 243 billion euros. The figures for 2022 are preliminary. The final figures will be published and entered into the visualisation and the statistical database in June, when we have compiled the figures from the financial statements of all pension providers. 

The Finnish Centre for Pensions previously published that the assets at year-end 2021 were 257.5 billion euroa. The figure has been adjusted by more than one billion euros due to the determination of Kela’s pension assets. The statistical database will be corrected in June. 

The decline in pension assets for 2022 was mainly due to investment losses. They amounted to 14.9 billion euros. Pension assets include assets intended to cover earnings-related pension liabilities. The largest portion of pension assets comprises investment capital. Pension assets also include contribution claims of around 3 billion euros. Contribution claims include contributions that fall due after the turn of the year and outstanding contributions. 

Money flows of earnings related pensions in 2021

The visualisation of the earnings-related pension money flows illustrates the assets of the earnings-related pension system and their flows in given years.

The user can select the desired year and examine how the earnings-related assets flowed in that year. Click the link below to access the visualisation.

Link to access the visualisation

In addition to paying earnings-related pensions, pension contributions collected are funded and used to pay the maintenance and business costs of the pension providers. Such costs include, for example, costs arising from pension provider operations such as wages, commissions and additional personnel expenses. Costs arising from the investment operations of a pension provider are not included in the operating costs.

Earnings-related pension providers have mainly invested their pension assets in shares, bonds and real estate, both domestic and foreign. More detailed information on the investment operations of statutory pension assets is available on, for example, the website of the Finnish Pension Alliance TELA.

(Updated on 21 March 2023)

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