Pension assets value rise in spring – salary pot also important for pension financing
The investment markets showed swings in both directions in the first half of the year. In Q2, the trend became positive, with earnings-related pension assets growing by EUR 2 billion. In total, at the end of June, funds available for the financing of Finnish earnings-related pensions were worth a total of EUR 272 billion. These are the data found in fresh statistics from TELA, the Finnish Pension Alliance.
“Tensions in geopolitics and trade rattled the development of investment markets during the year. The stock markets took a hit in April when the US announced high tariffs. However, the markets quickly recovered from the dip, and the share of equity and fixed-interest investments grew slightly during the quarter,” says Mikko Mäkinen, Chief Economist at TELA.
Whereas returns in Q1 were negative, Q2 brought them back into the black. So far this year, the nominal return as of the end of June was 1.3% and the real return, which accounts for the effect of inflation on overall return, was 1.2%.
“The drop in the US dollar has particularly affected investment returns this year. This decreases investment returns reported in euros. Factors pushing the value of the dollar down are uncertainty about American trade policy and concerns about the burgeoning federal budget deficit,” Mäkinen says.
The Helsinki stock exchange, by contrast, performed well in the first half of the year.
“In Q2, the pension providers slightly increased their investments in Finland. The share of their Finnish investments was 19% at the end of June, which translates to €52 billion,” Mäkinen says.
Salaries important in financing pensions
Even though the growth in pension assets is good news from the perspective of future pensions, the other foundation of pension funding, earnings-related pension contributions, must also be borne in mind. About a fifth of the annual pensions paid annually to private-sector retirees is at present covered by funds and the returns on them, with the rest being covered by pension contributions.
The pot of pension contributions is, in turn, large because of the total sum of gross salaries paid to all employees. The larger the salary sum, the larger the pot grows from pension contributions – and vice versa.
“We mustn’t forget how important salaries are in financing pensions. In addition to being a key factor in the earnings-related pension system, they are significant for the public finances,” Mäkinen says.
The Government is currently preparing for next week’s budget negotiations, which will aim to strengthen the public purse and seek ways to reduce borrowing.
“The long-term growth prospects of the Finnish economy are beleaguered by weak productivity and the shrinkage of the working-age population. For Prime Minister Orpo and his Government, a top priority at the budget negotiations should be investing in the components of economic growth, such as R&D, raising the level of education, and immigration for work and study. Slowing down public borrowing requires economic growth, too,” Mäkinen says.
Details on pension asset amounts
The amount of the pension providers’ investable earnings-related pension assets at the end of June 2025 totalled EUR 272 billion. During Q2, assets grew by EUR 2 billion.
The return on assets in the first half of the year (January–June) was 1.3% in nominal terms, and 1.2% in real terms adjusted for inflation. The long-term real return, since 1997, was 3.9%.
In the first half of the year, the real yields per investment class were:
- equity and equity-type investments 1.3%
- fixed-interest investments 1.3%
- property investments 0.6%
- alternative investments 0.8%
There were no significant changes to the breakdown in assets by class or geographical region during the quarter.
The figures for earning-related pension assets compiled by TELA pertain to the pension assets managed by pension providers, pension funds, pension foundations, the Pension Fund for the Employees of KELA, KEVA, the Church Pension Fund, the Farmers’ Social Insurance Institution, the Seafarers’ Pension Fund, the Bank of Finland’s Pension Fund, and the State Pension Fund of Finland. Only statutory pension coverage is included in the statistics.
The pension assets for which TELA compiles statistics do not contain other receivables and debts or tangible assets recognized in the balance sheet. The earnings-related pension assets listed here refer to investable assets.
More detailed information on the amount and allocation of investment assets is available in full on the Amount of pension assets page of the TELA website. You can also browse data on the TELA statistical data base.
TELA will next publish statistics on pension assets, for Q2 2025, in November–December.
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