The chief executive officer of Finnish pensions insurance company Veritas made a strong statement today in the debate over immigration policy, arguing that Finland needs newcomers to come in and work in order for its pension system to remain sustainable.
Carl Haglund, CEO of Veritas – the smallest of the four pension insurance companies on the private-sector side of Finland’s earnings-related pension system – said: “We will not be able to manage without employment-based immigration. We should all do our utmost to encourage skilled foreign employees to come to Finland.
“Objecting to immigration is like shooting oneself in the foot,” he said, releasing interim results for the Turku-headquartered provider, which covers self-employed people.
Many economic sectors were suffering from a shortage of skilled labour, he said.
“No alleviation of the situation is in sight since the share of the working-age population has declined and will continue to decline in the coming decades,” Haglund said.
Publishing its January-to-June report this morning, Veritas is the last of the four pension insurers to post first-half results this summer – reports in which three out the four firms have mentioned the politically-charged issue of immigration.
Ilmarinen CEO Jouko Pölönen said last week increasing labour immigration was necessary for Finland’s economy and the pension system, saying Finland had to be “an open society that is safe for all and where discrimination is not tolerated”.
Varma then said in its interim report that labour immigration, “if it were to continue”, would relieve the pressure to raise earnings-related pension contributions.
Finland’s government shifted politically to the right earlier this summer following April’s parliamentary election which toppled left-wing prime minister Sanne Martin.
The conservative National Coalition has formed a majority government with the anti-immigration, eurosceptic Finns Party and two smaller groups, and the government programme of prime minister Petteri Orpo published in June is notably tough on immigration to the Nordic country.
Asked to comment on the issue of immigration in Finland, and whether it was important for the sustainability of the pension system, Timo Löyttyniemi, CEO of the State Pension Fund in Finland (Valtion Eläkerahasto, VER) said:
“There are so many factors affecting the sustainability of the pension system. Immigration, if work related, is one of the factors.
“I would expect some changes in the future policies regarding immigration,” the VER CEO told IPE.
Regarding investment results, Veritas reported a 2.4% return for the first half of this year, with the value of investments rising to €4.3bn at the end of June.
Equities produced a 4.8% return, fixed income assets returned 3.5% while real estate ended the six months with a -3.3% loss, according to the report.
Veritas’ CIO Kari Vatanen said: “The year has started better than expected in the international equity markets, but the development in the Finnish equity market has been very poor.”
The Helsinki Stock Exchange’s general index had slumped around 10% since the start of 2023, he said.
Elo, the third-largest of the four pension insurers, reported yesterday that investments had generated a 2.8% return in the first half, with the market value of assets rising to €29bn at the end of June.
Hanna Hiidenpalo, deputy CEO of Espoo-based Elo, said: “The development of returns from the equity and fixed income markets reflects investors’ expectations of a gradual slowing down of inflation without a significant diminishing of economic growth”.
That would probably mean a turnaround in the monetary policy of central banks, she said.
With the four pension insurers now having reported first-half returns, Ilmarinen ranks number one with a 3.7% gain, followed by Elo with 2.8%, Varma with 2.6% and Veritas with 2.4%.
The public-sector provider Keva, Finland’s biggest pension fund, on Tuesday reported a 3.1% return.