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Prediction of return on shares

In the private sector, the technical provisions of pension providers include an item of its own: an equity-linked buffer (OLV), which enables pension providers jointly to bear part of the risk arising from fluctuations in returns on equities. On the basis of the realised returns on equities, this component of the technical provisions is either increased or decreased by the so-called equity coefficient, which is determined by the Finnish Centre for Pensions. The equity coefficient takes into account the weighting coefficients and point figures, which we update on this page once every quarter.

Weighting coefficients and the values of sub-indicies

Weighting coefficients of the OLV index and the point figures of sub-indices at the end of each quarter of this year have been compiled in the appended table. The next update, for 30 September 2022, will be published during week 8 in 2023.

Date31.3.202230.6.202230.9.202231.12.2022
Updated25.5.202226.8.202225.11.2022week 8/23
weightindex
value
weight index
value
weight index
value
weight index
value
Finland34.0226558.3534.6324423.5235.2623436.08
Europe *29.9211127.0629.6710207.1527.649777.10
USA *31.068582.5229.197695.6131.477799.69
Japan *5.0023.256.5121.395.6321.30
Total100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Source of the index values: Bloomberg, MSCI, Nasdaq OMX Nordic

The average allocation of equity investments to different areas is a weighted average of all private-sector pension institutions. As from 30 June 2019, the maximum weight of individual pension funds is restricted to 15 per cent. Starting in 2015, the maximum weight was 20 per cent. Before 2015, the maximum weight had been 15 per cent.

Principles of prediction

Changes in the equity-linked buffer (OLV) are calculated retrospectively for each quarter. The calculation is made for the whole pension liability in the same quarter, on the basis of the actual average rate of return on quoted shares included in investments made by private-sector pension providers for the same quarter (known as the average return). The shares included in the calculation are limited to shares listed on OECD and EEA stock exchanges.

When the average return is calculated, the weight given to an individual pension provider’s share investments is at most 15 per cent.

After each quarter, the Finnish Centre for Pensions collects data from authorized pension providers to calculate the final liability. In addition to the rate of return, the data collected include information on tied up capital.

Real-time determination of liability requires prediction

For the real-time determination of pension providers’ liability, the above rate of return on shares must be estimated for the current quarter and the quarter just ended, on which the collection and processing of the final data have not yet been completed.

According to the position taken by TELA’s Advisory Committee for Calculation Criteria Affairs, estimation is made using a weighted share index whose relative change (as a percentage) is determined with sufficient accuracy to predict the rate of return used in the final calculation of the equity-linked buffer. The joint Investment Reporting Group has decided to recommend a weighted index covering four regions.

The data needed to weight the indices are gathered in connection with the collection of quarterly information on the investment distribution and returns on earnings-related pension providers. Thus, the weighting coefficients of share indices are also updated four times a year. The Investment Reporting Group also monitors how well the index predicts the actual return for each quarter.

Data from previous years

Weighting coefficients of the OLV index and the values of sub-indices at the end of each quarter starting from the end of 2006.

Year 2021

Date 31.3.2021 30.6.2021 30.9.202131.12.2021
Updated 27.5.2021 27.8.2021 26.11.2021 25.2.2022
weight index
value
weight index
value
weight index
value
weight index
value
Finland 35.49 25822.37 35.38 28295.06 34.97 28163.67 35.90 29671.54
Europe* 30.41 10117.92 31.77 10755.12 31.02 10877.29 31.24 11756.57
USA* 28.88 7026.43 28.02 7525.06 29.32 7768.23 28.80 8817.50
Japan * 5.22 23.72 4.83 23.36 4.69 24.94 4.06 24.38
Total 100.0100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Year 2020

Date31.3.202030.6.202030.9.202031.12.2020
Updated27.5.202028.8.202027.11.202026.2.2021
weightindex
value
weight index
value
weight index
value
weight index
value
Finland37.4816427.6637.9319718.1537.7521624.1436.6623673.41
Europe *32.387432.8931.138404.2430.078406.5031.549277.00
USA *24.454809.4226.195672.1427.115909.4925.956323.32
Japan *5.6918.234.7519.995.0720.495.8522.29
Total100.0100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Year 2019

Date31.3.201930.6.201930.9.201931.12.2019
Updated28.5.201928.8.201927.11.201927.2.2020
weight index
value
weight index
value
weight index
value
weight index
value
Finland37.4119023.3436.7819222.4136.1219580.4336.5220469.44
Europe *33.628522.2335.068827.1434.839063.4433.779566.48
USA *22.655041.8022.265191.7823.025518.0423.745833.69
Japan *6.3319.255.9019.086.0320.575.9721.53
Total100.0100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Year 2018

Date31.3.201830.6.201830.9.201831.12.2018
Updated28.5.201828.8.201813.12.201827.2.2019
weight index
value
weight index
value
weight index
value
weight index
value
Finland35.4818248.6836.0619387.6336.0119859.6237.0316994.76
Europe*35.338019.7634.318402.5034.148533.3833.677533.65
USA *24.654198.6825.444589.8424.814978.7723.874353.03
Japan *4.5419.234.1919.755.0420.565.4317.66
Total100.0100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Year 2017

Date31.3.201730.6.201730.9.201731.12.2017
Updated23.5.201725.8.201728.11.20171.3.2018
weightindex
value
weightindex
value
weightindex
value
weightindex value
Finland34.9616550.5136.9117660.1935.4817898.3035.8517682.91
Europe *37.168027.6837.898102.1638.148339.8136.118395.09
USA *24.384244.8921.714099.5122.624140.2424.034346.50
Japan *3.5018.213.4918.193.7618.334.0119.60
Total100.0100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Year 2016

Date31.3.201630.6.201630.9.201631.12.2016
Updated1.6.201630.8.201628.11.201628.2.2017
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland35.4613530.2935.7613850.4536.6215221.0734.9615853.93
Europe *39.936823.7739.106837.3838.467171.7637.307566.39
USA *21.663401.9422.143574.3221.933692.3824.784059.07
Japan *2.9514.843.0115.412.9816.652.9617.54
Total100.0100.0100.0100.0

* All three index values have been obtained by dividing them with the currency exchange rates calculated by the ECB. Currency exchange rate values

Year 2015

Date31.3.201530.6.201530.9.201531.12.2015
Updated29.5.201528.8.201525.11.201525.2.2016
weightindex
value
weightindex
value
weightindex
value
weightindex value
Finland38.3314296.7337.2513514.4735.8012443.8035.6713995.23
Europe 38.871533.10039.121454.57641.641347.26941.611412.624
USA 20.812067.8921.282063.1120.271920.0320.412043.94
Japan1.991543.112.351630.402.291411.162.311547.30
Total100.0100.0100.0100.0

Year 2014

Date31.3.201430.6.201430.9.201431.12.2014
Updated26.5.201425.8.201424.11.20142.3.2015
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland38.3511123.3536.1711837.5535.5411859.6935.5812073.16
Europe 38.761371.68539.841394.20838.191385.43039.241381.719
USA 20.791872.3422.101960.2323.921972.2923.242058.90
Japan2.101202.891.891262.562.351326.291.941407.51
Total100.0100.0100.0100.0
Date30.9.201431.12.2014
weight wiht maximum 20 % institutional weight
Finland36.0136.27
Europe37.7238.61
USA24.0223.25
Japan2.251.87
Total100.0100.0

Year 2013

Date31.3.201330.6.201330.9.201331.12.2013
Updated20.5.201327.8.201325.11.201326.2.2014
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland35.988900.3935.988767.7137.9410230.0137.5110918.38
Europe 42.111219.13341.791191.38641.691282.93439.001354.909
USA 19.811569.1919.901606.2818.771681.5520.931848.36
Japan2.101034.712.331133.841.601194.102.561302.29
Total100.0100.0100.0100.0

Year 2012

Date31.3.201230.6.201230.9.201231.12.2012
Updated1.6.201229.8.201230.11.201226.2.2013
weightindex
value
weightindex
value
weightindex
value
weight index
value
Finland43.268267.9342.387201.6144.357778.741.048294.50
Europe36.981096.80535.811034.14136.831095.1340.741147.20
USA 17.661408.4720.211362.1617.381440.6717.271426.19
Japan2.10854.351.60770.081.44737.420.95859.80
Total100.0100.0100.0100.0

Year 2011

Date31.3.201130.6.201130.9.201131.12.2011
Updated28.4.20118.9.201124.11.20112.3.2012
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland42.269682.5640.958987.5846.566990.0444.737183.87
Europe 41.251187.06840.011170.59536.05959.76737.571026.502
USA 14.171325.8317.341320.6415.331131.4215.731257.60
Japan2.32869.381.70849.222.06761.171.97728.61
Total100.0100.0100.0100.0

Year 2010

Date31.3.201030.6.201030.9.201031.12.2010
Updated30.4.201020.8.201027.10.201028.1.2011
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland43.018343.9641.517743.0044.188849.7043.869569.99
Europe 37.641158.04636.891028.4138.671117.20738.261168.555
USA 16.231169.4318.481030.7114.381141.2014.821257.64
Japan3.12978.813.12841.422.77829.513.06898.80
Total100.0100.0100.0100.0

Year 2009

Date31.3.200930.6.200930.9.200931.12.2009
Updated24.4.200920.8.200929.10.200926.1.2010
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland46.514568.92448.365874.56643.627070.7444.637375.32
Europe 34.26800.52434.07907.88938.311086.4439.021124.75
USA14.25797.8713.02919.3214.51057.0813.191115.1
Japan4.98773.664.55929.763.57909.843.16907.59
Total100.0100.0100.0100.0

Year 2008

Date31.3.200830.6.200830.9.200831.12.2008
Updated24.4.200820.8.200829.10.200826.1.2009
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland44.748888.9341.248206.6141.236675.1948.305103.28
Europe 37.011320.0239.421251.59637.941104.44132.90911.570
USA 13.501322.7013.821280.0014.931166.3612.68903.25
Japan 4.751212.965.521320.15.901087.416.12859.24
Total100.0100.0100.0100.0

Weighting coefficients as at 31 December 2008, adjusted using data obtained later.

Date31.3.200830.6.200830.9.200831.12.2008
Updated26.1.2009
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland48.24
Europe 32.90
USA 12.69
Japan6.13
Total100.0

Year 2007

Date31.3.200730.6.200730.9.200731.12.2007
Updated24.4.200724.8.200726.10.200730.1.2008
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland40.789742.8441.8810578.53042.8710680.2243.429691.93
Europe 40.211535.53138.941615.23737.241571.3437.981543.30
USA 12.851420.8613.191503.35012.971526.7513.631468.36
Japan6.161713.615.991774.8806.921616.624.971475.68
Total100.0100.0100.0100.0

Year 2006

Date31.3.200631.12.2006
Updated2.1.200726.1.2007
weightindex
value
weightindex
value
weightindex
value
weightindex
value
Finland40.1240.848962.17
Europe39.8039.961493.513
USA 13.4712.731418.30
Japan 6.616.471681.07
Total100.0100.0

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