Strong stock markets boost pension assets – EUR 279 bn in funds

“Even though this year has been characterized by geopolitical and trade tensions, investment markets have performed surprisingly strongly. The nominal return on earnings-related pension assets in January–September was 4.4%, and the real return, which accounts for the effect of inflation on overall return, was 4.0%,” says Mikko Mäkinen, Chief Economist at TELA, the Finnish Pension Alliance.

There has been much public discussion this year on investing earnings-related pension assets in Finnish growth companies.

“Earnings-related pension assets have been invested in Finnish growth companies for many years, and I’m certain that will continue in the future. Of course, investment decisions are based on considering the relationship between returns and risks when choosing investments,” Mäkinen says.

At the end of September, 19% of earnings-related pension assets were invested in Finland, equivalent to EUR 54 billion. That meant the euro value of Finnish investments increased by EUR 2 billion from the end of June, while remaining at the same level proportionally.

Regulation protects pension assets – including after the pension reform

A draft proposal on the pension reform, prepared by a working group subordinate to the Ministry of Social Affairs and Health, is expected to be put out for consultation at the start of December. The reform will allow private-sector earnings-related pension providers to take on more investment risk. The goal is to strengthen the financing of the pension system and reduce the upward pressure on pension contributions in the future.

“The reform will mean more pension assets being invested in equities that have historically outperformed other investments. Investment returns may also fluctuate more, but in the long run the differences will even out, because pension providers invest over a very long term. For example, not even a five-year downturn would destabilize the system in the long run,” Mäkinen says.

The reform has been criticized in the public discussion for failing to take sufficient account of investment risks. However, pension providers’ risk management is strictly regulated – and will continue to be so after the reform. The purpose of the regulation is to protect pension assets and pensions.

“By law, pension providers must have a sufficient risk management system which covers risk identification, measurement, monitoring, oversight and reporting. The solvency regulation of private-sector earnings-related pension providers defines the permitted risk level, meaning the provider can meet its obligations even when risks are realized. The Finnish Financial Supervisory Authority, Fiva, also monitors pension providers’ solvency and investments regularly,” Mäkinen says.

In addition to allowing greater investment risk, another central element of the pension reform is an increased level of pre-funding. When old-age pension funds are increased, a larger share of future pension expenses can be financed by funds and their returns.

“This reduces the pressure to increase pay-as-you-earn pension contributions in the future, which is particularly important for young generations. The larger funds will also help withstand bad investment years better,” Mäkinen says.

Details on pension asset amounts

The amount of the pension providers’ investable earnings-related pension assets at the end of September 2025 totalled EUR 279 billion. The assets grew by seven billion euro in the third quarter of the year.

The nominal return on assets in January–September was 4.4%. The inflation-adjusted real return was 4.0%. The long-term real return, since 1997, was also 4.0%.

The nominal and real returns per investment class in January–September were as follows:

• equity and equity-type investments: nominal 6.1%, real 5.7%
• fixed-interest investments: nominal 2.7%, real 2.3%
• property investments: nominal 1.5%, real 1.1%
• alternative investments: nominal 2.3%, real 1.9%.

There were no significant changes to the breakdown by asset class during the quarter.

Geographically, the share of investments outside the Eurozone grew by 2.6 percentage points (12 billion), whereas the share of investments in the rest of the Eurozone fell by 2.4 percentage points (-6 billion). The proportional share of Finnish investments remained the same, while growing in euro value by two billion.

The figures for earnings-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 include other balance-sheet receivables and liabilities or tangible assets. 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 database.

TELA will next publish statistics on pension assets, for Q4 2025, in March 2026.

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