Investments at Finnish State Pension Fund VER returned 6.4% last year, with equities producing enough profit to offset a 1.8% loss on fixed income holdings.
Reporting figures for 2013, the pension fund said the market value of investments rose to €16.3bn at the end of the year from €15.4bn at the end of 2012.
VER transferred nearly €1.7bn to the state budget, up from €1.6bn the year before.
The contribution was more than the pension contributions received by the fund of €1.63bn, the fund pointed out.
The year before, the pension fund had received more than it transferred.
Managing director Timo Löyttyniemi said: “VER has moved into the role of balancing pension costs.”
This development was assumed to continue, he said.
“Over the coming years, VER will increasingly balance the pressure of the rising state pension costs,” he said, as the return on investments in the short and the long term had remained at a good level.
The 2013 return undercut the previous year’s 11.3% investment profit.
The fund said the strong rise of the equity market was the most important factor contributing to overall profit.
On the other hand, the year was particularly hard for fixed income investments, it said, with interest rates low as a result of expansionary central bank policies in the wake of the financial crisis.
The fixed income loss of 1.6% compares with a profit of 8.8% generated by the asset class in 2012.
Equities produced 18.2%, up from 16.8% the year before.
The highest returns within equities came from investments in developed countries, VER said, with Finnish shares providing the highest returns at more than 30%.
Returns on emerging market equities, however, finished mostly negative at the end of 2013.
VER said it was a big net seller of equities at the end of the year following the strong performance.
Allocation to the asset class subsequently stood at 39.9% at the end of December, only slightly higher than the 38.4% share the fund held a year before.