Earnings-related pension providers’ investment work bears fruit – pension assets exceed the EUR 300 billion mark

The amount of investable pension assets in the earnings-related pension system has risen above EUR 300 billion for the first time. The total amount of assets at the end of June was EUR 300.2 billion. The amount of assets grew by EUR 16 billion during the second quarter of the year.

“The consequences of the war in Iran, which began in February, accelerated inflation and increased uncertainty in the markets. However, the performance of key stock markets was strong in the second quarter, driven in particular by investments in AI,” says Mikko Mäkinen, Chief Economist at TELA, the Finnish Pension Alliance.

The investment return for January–June was 6.2% in nominal terms and, accounting for inflation, 4.2% in real terms. The figures are taken from TELA’s latest statistics on the development of earnings-related pension assets during the second quarter of 2026.

Growth in assets helps secure future earnings-related pensions – but only for employees

Mäkinen considers the returns achieved on earnings-related pension assets highly successful given the challenging investment environment in early spring. Strong returns and the growth of pension assets are good news, particularly from the perspective of pensions payable in the future.

“Just over a fifth of the pensions paid in the private sector are currently covered by pension funds and their returns. With the recent pension reform, the importance of funds and investment returns in financing pensions will increase further,” Mäkinen notes.

“The pension assets and their growth reduce the pressure on today’s younger generations to increase pension contributions in the future. Meanwhile, growing pension assets can strengthen confidence in the sustainability of the earnings-related pension system as the population ages and the birth rate remains low,” Mäkinen assesses.

When discussing the benefits of pension funds, however, it is worth remembering that pre-funding does not currently benefit all pension systems, but only the earnings-related pensions of employees. No equivalent pre-funding arrangement exists in the pension system for the self-employed.

“In the self-employed persons’ pension system (YEL), pension expenditure has long exceeded contribution income, and financing has increasingly had to rely on government support and taxpayers. The state’s contribution to self-employed persons’ pensions is already approximately EUR 600 million this year,” Mäkinen points out.

The only way to strengthen the long-term financial sustainability of self-employed persons’ pensions would be to gradually introduce pre-funding in a manner similar to the pension system for employees in the private sector. The earnings-related pension sector has indeed put forward various options for implementing such pre-funding.

“Now that the Self-Employed Persons’ Pensions Act is being reformed, it would be important to carry out the reform in a way that would enable pre-funding to be introduced in the future. The aim of the YEL reform should be to strengthen the sustainability of public finances and to reduce long-term dependence on government funding,” Mäkinen stresses.

Pension reform strengthens long-term returns

The pension reform concerning the private-sector earnings-related pension system, which entered into force in July, gives earnings-related pension providers more scope to increase investment risk. This in turn makes it possible to pursue better returns over the long term.

“Although short-term growth in pension assets is always good news, what’s essential is to pay specific attention to long-term returns. The liabilities for paying future pensions extend several decades from now,” Mäkinen notes.

Increasing investment risk primarily means, in practice, making more equity investments. Their share has already grown in recent years: equity investments accounted for an average of 61% of the risk allocation of earnings-related pension insurers’ investments at the end of June 2026, compared with an average of 54% at the end of 2024. With the pension reform, the weight of equity investments in earnings-related pension insurers may rise to around 70%, according to estimates presented in public.

“As investment risk increases, the annual variation in returns may be greater than before, which will require society to be able to tolerate low returns for potentially extended periods. On the other hand, the pension reform is not intended to produce quick gains – rather, strengthening the financing of earnings-related pensions through investment returns is long-term work,” Mäkinen notes.

It is also good to bear in mind that even though there are more opportunities for raising investment risk, pension assets must continue to be invested profitably and securely. What is more, earnings-related pension providers must also continue to always hold sufficient capital to meet their pension liabilities.

Details on pension asset amounts

The amount of the pension providers’ investable earnings-related pension assets at the end of June 2026 totalled EUR 300.2 billion. The assets increased by EUR 16 billion during the second quarter.

For January–June, the nominal return was 6.2 per cent. The real return, adjusted to remove the effects of inflation on total return, was 4.2 per cent. The longer-term return since 1997 was 6.0 per cent in nominal terms and 4.1 per cent in real terms.

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

• equity and equity-type investments: nominal 9.1 per cent, real 7.0 per cent
• fixed-interest investments: nominal 1.7 per cent, real -0.3 per cent
• property investments: nominal 0.6 per cent, real -1.3 per cent
• alternative investments: nominal 5.4 per cent, real 3.2 per cent.

There were no significant changes to the asset-class or geographical allocation during the quarter.

The figures for earnings-related pension assets compiled jointly by TELA and Statistics Finland 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 statistics are presented here do not include other receivables and liabilities or tangible assets recognized in the balance sheet. The aforementioned earnings-related pension assets 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 the end of September 2026, at the turn of November and December.

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