Finnish schemes get boost from equities
FINLAND – Finnish pension organizations made a 12.9% return on equities in the first half of the year, according to Tela, the Finnish Pension Alliance.
But returns in other asset classes were not so strong. Fixed income returned 3.8%, while real estate yielded 3%.
Tela said total average returns reported by its members were 6.6%, or 5.8% once inflation was taken into consideration.
Returns between 1998 and 2004 also exceeded long-term expectations, with real returns of 4.4%.
The returns ranged from just under 6% to almost 7.5%. The highest return was at the State Pension Fund (VER), at 7.4%. Ilmarinen posted 6% while Varma and Etera both returned 5.9%.
And there was also a range of returns when classified by type of institution.
Company and industry funds returned 5.7% while investments at public sector institutions yielded 7.2%. Pension insurance companies returned 6.4%.
Finland introduced a pension reform at the beginning of 2005, which saw the average effective retirement age postponed by 2-3 years. A renewed earnings-related pension aimed to reward continued participation in working life.