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 increased in 2021 with 33 billion euros. Total assets at year-end were 258 billion euros. The figures for 2021 are preliminary at this point. The exact figures will be included in the visualisation and the database in June 2022 when the figures from the financial statements of all pension provides have been compiled and the figures are final.
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.
The pension assets include all assets meant to cover the earnings-related pension insurance obligations. Most of the pension assets are in the form of investment capital, which amounted to 255 billion euros at year-end.
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.
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 23 March 2022)