Pension Funds

In Finland, the statutory earnings-related pension scheme is partly funded. For example, private-sector pensions have been partly funded since the scheme came into force in 1962. In many other European countries, buffer funds have been created as late as in the 1990s and, by nature, the statutory systems are pay-as-you-go systems that are not prefunded. As a result, the accrued statutory pension assets are relatively small in those countries compared to in Finland.

As a rule, supplementary pension schemes are funded. For example, the extensive pension assets in Denmark and the Netherlands are a result of compulsory and fully funded supplementary pensions. The French obligatory supplementary pensions AGIRC and ARRCO form an exception as they are pay-as-you-go schemes.

The following comparative figure presents the sizes of pension funds in different countries in relation to the country’s GDP. The statistics date back to 2016 and cover statutory (1st tier) and labour-market-based supplementary pension arrangements (2nd tier), but not individual pension insurance. The primary source is OECD’s database Global Pension Statistics. For some countries, that data has been supplemented with national statistics.

For example, in addition to occupational supplementary pension funds, the figures for Norway include the state pension fund (Statens pensjonsfond), which is lacking from the OECD figures. Norway’s specialty are the country’s big oil reserves, on which the state’s pension fund is largely based. Despite its name, the state’s pension fund is not intended to be used only to cover pension expenditure. Part of its return can be used to balance the state budget.

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