FINLAND – Ilmarinen had reported a 12.1% return on investments in 2005 – one of the best years in its history.

The figure – which represents a €2.17bn return - compares with a 7.8% return in 2004. “Our good results are based on our strong solvency position, which allows an equity-oriented investment strategy,” said managing director Kari Puro.

“Thanks to the positive trend in share prices, investment income exceeds even the good levels of the previous year and further strengthens our solid solvency position."

Solvency capital rose to €5.1bn at the end of the year from €3.6bn a year before.

Equities yielded 30.7%, with the asset class’s share of the total portfolio rising to 34% from 29%.

“The good investment return more than doubled Ilmarinen's overall result for 2005 and which amounted to €1.5bn,” the company said.

It added that the decision taken by two large companies to transfer staff basic pension cover under the TEL scheme from a pension fund to Ilmarinen would “significantly increase the number of those insured by Ilmarinen”.

At the end of 2005, Ilmarinen was responsible for the TEL insurance of 357,000 (349,000) employees, and the number of self-employed persons insured by Ilmarinen under the YEL scheme stood at 49,495 (49,580).

Elsewhere, the State Pension Fund (VER) returned 14.9% on investments in 2005 – taking its total assets to €8.2bn from €6.9bn a year before.

“The investment environment was outstanding in 2005, with good return rates for both fixed-income and equity investments,” said managing director Timo

“We will continue to diversify the composition of our investment portfolio, increasing its variety since, in the next few years, we plan to place approximately 10% of our investment portfolio in the category of other investments, such as property funds, infrastructure and capital funds.”

Meanwhile, the €20bn Finnish local government pensions institution KEVA is considering restructuring its asset portfolio, according to reports.

Global Pensions quoted executive director Jarri Sokka as saying the allocation to equities will be increased to 15% - with further assets going to private equity and hedge funds.