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The majority of the pension funds in our comparison reached a real return of 5–10 per cent despite the exceptional year. The clearly highest return, around 20%, was made by the Swedish buffer fund AP6 that invests only in equities. The Finnish pension investors weathered the peculiar year with varying degrees of success.

The international comparison of investment returns made by the Finnish Centre for Pensions includes 23 pension investors. The comparison covers the major Finnish earnings-related pension providers, as well as large investors from northern Europe, North America and Asia.  

The year 2020 was one of the oddest years in economic history. The corona pandemic that put the entire world on halt caused stock market prices to plummet in February-March. Thanks to hefty resuscitation of central banks, the stock prices rose quickly.  

“The pronounced rise of market prices continued throughout the year and offered better-than-expected returns in all asset categories for pension asset investors. The return was particularly good for listed shares whose value rose exeptionally fiercly,” explains director Jaakko Kiander (Finnish Centre for Pensions).     

The earnings-related pension investors have been divided into two groups in the comparison based on their risk bearing capacity: those that are bound by sustainability regulations and those that are not. The real returns were reviewed over a one-year, a five-year and a ten-year period between the years 2011 and 2020.  

Investments in high-risk instruments yielded the highest returns in 2020 

The largest return, nearly 20 per cent in real term, was achieved by the small Swedish buffer fund AP6 (19.8%). The second and third highest return were achieved by the Canadian buffer fund CPPIB (11.4%) and the Norwegian buffer fund SPU (10%). 

In terms of its investment assets (€4.5 billion), AP6 is the smallest AP buffer fund in the Swedish earnings-related pension system. The fund, profiled as a venture capital investor, is a closed fund and adheres to less strict regulations than do the other AP funds.  

In terms of its allocation, AP6 relies solely on unlisted assets and has specialised in unlisted high-risk instruments.  Nearly all other AP funds that adhere to stricter regulations made steady, good average annual returns.  

“AP6 reached one of its history’s highest annual returns. AP2, on the other hand, received a clearly weaker return than the other AP funds. 2020 was interesting also in the respect that an investment regulation reform raised the AP funds’ possibilities to increase risks in its investment operations,” says liaison manager Mika Vidlund (Finnish Centre for Pensions). 

Return of Finnish pension investors in line with controls 

The majority of the pension funds included in our comparison reached a real return of 5–10 per cent despite the exceptional year. 

The dispersion among Finnish pension asset investors was larger than usual.  The highest real returns on investments (7.2%) were recorded by the Church Pension Fund (KER) and Ilmarinen Mutual Pension Insurance Company (6.8%). The latter reached a result that was among the top results of those operating under solvency regulations. The weakest performance (3.6%) was recorded by the State Pension Fund (VER), Elo Mutual Pension Insurance Company (3.3%) and Varma Mutual Pension Insurance Company (2.5%). 

On average, the Finnish pension asset investors achieved a real return of 4.9 per cent. The result is in line with that of the Swedish buffer funds operating under similar solvency rules (Alecta, AMF) and the Dutch public sector and health care professionals’ pension funds (ABP, PFZW). Compared to the Netherlands, however, Finland benefited from an inflation rate that was around one percentage point lower than that in the Netherlands. This improved the real return of the Finnish pension asset investors. 

Norway benefited from the weaker Krone 

The year of the corona pandemic reduced the return of many pension investors over a period of 10 years since the favourable investment year 2010 was left outside the review period.  

The highest real returns in 2011–2020 were recorded by the Canadian buffer fund CPPIB (9.1%), the Norwegian buffer fund SPU (9.0%) and the Swedish buffer fund AP4 (8.6%).  All three have performed steadily and convincingly and benefited from a decade-long stock appreciation.  

The average annual return of the Finnish pension investors over a period of one decade was 4.4 per cent, which is an ample one percentage points below that of the controls (PFZW, ABP, AMF, Alecta).  

“Exchange rates also affect the returns. Particularly the Norwegian SPU has benefited from a weaker Krone in relation to the euro and the US dollar. It invests only in instruments outside Norway, so the values of the investments have increased when measured in Krone,” senior adviser Antti Mielonen (Finnish Centre for Pensions) points out.  

Pension investors operate in different environments 

No direct conclusions on the success of the investment operations can be drawn based on the comparison. The final result will be affected by, among other things, the pension provider’s currency region and exchange rate and the investment regulations in place. Read more about this on the website of the return comparison. 

Boundary conditions for comparison of investment returns 

  • Starting year and length of comparison period affect the results 
    • Substantial annual fluctuation in returns 
    • Long-term average returns depend on selected period 
  • Currency region and exchange rate fluctuations cause differences in results 
    • Returns expressed in national currency (that is, the same currency in which the pensions are paid) 
    • Real returns provide better comparability of long-term investment returns as the effect of inflation is removed 
  • Investment operations take place within the solvency framework and other regulations limiting investment risks 

Read more

Investment return on pension assets (; real returns, allocations, investment assets, actors  
Investments (earnings-related pension system (

Finnish Centre for Pensions – Central body of and expert on statutory earnings-related pensions