Financing of Pensions
In Finland, earnings-related pensions are financed according to the pay-as-you-go (PAYG) principle and the partial funding principle. For the main part, the pensions paid out in a given year are financed with the pension contributions paid that year. The remaining part is financed with the investment return of the funded pension components.
The earnings-related pension system’s assets decreased in 2022 with 16.4 billion euros. Total assets at year-end were 242.4 billion euros.
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 decline in pension assets for 2022 was mainly due to investment losses. They amounted to 14.8 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.
The Finnish Centre for Pensions compiles time series of pension providers’ financial statements. The pension provider also submit data for pensions’ division of costs. The tables relating to the financing of earnings-related pensions are published annually in the Statistical database of the Finnish Centre for Pensions. In addition, statistical data on pension financing are presented in the publication series ”Statistics, Finnish Centre for Pensions”.
Assets and cash flows
The cash flows tables present the financing system of the earnings-related pension scheme from 2007. Tables consist figures of pension assets, insurance contributions, contributions of the Employment fund, transfers, state shares, paid claims, overall operating costs and investments returns. More detailed cash flow table of the Employees Pensions Act and Seafarer’s Pension Act (henceforth TyEL and MEL) schemes are shown.
Financial statements figures
The financial statements figures of the pension providers since 2007. Tables consist figures of earnings-related pension insurance, investment operations, paid claims, administrative expenses, technical
provisions and solvency.
Cost division figures
The tables consist figures of paid claims and technical provisions since 2007.
Statistical database contains time series since 1962 on paid claims, premium income, pension assets, wage sums and numbers of pension providers of the earnings-related pension scheme.
(Updated on 5 June 2023)