FINLAND - Eläke Fennia Mutual Pension Insurance Company boosted its coffers in the first nine months of this year thanks to a 8.1% return driven by equity investments.

The value of the pension fund increased from €5.9bn at the end of June 2009 to €6.1bn by the end of September, as the quarterly figures highlighted a successful period of customer transfers. (See earlier IPE article: Finnish H1 pension figures stay positive)

Pension Fennia received a total of €8.8m of TyEL (Employees Pension Act) premium income from other pension companies, while the number of TyEL and YEL (self-employed person's act) policies increased by 335 and 662 respectively.

Figures showed the scheme's equity portfolio produced the best return of 27.4%, with quoted equities returning 36.5% against the private equity return of -16.6%.

Elsewhere, hedge fund investments also performed well with a return of 13.6% and the fixed income portfolio yielded an overall return of 4.5%, with bonds returning 5.4%, while real estate produced a total return of 3% as the 5.6% return from direct investments offset the -9.4% return on real estate investment funds.

The positive return seen so far in 2009 means Pension Fennia's solvency ratio has improved to 15.9% of technical provisions, from 14.1% at the end of June, while the solvency margin has increased from 2.5 to 2.7 times the solvency limit in the last three months.

That said, the pension fund warned that the effects of the recession, such as delayed insurance premiums, were more visible in the last quarter, and said an expected increase in unemployment could impact premium income going forward.

Lasse Heiniö, managing director of Pension Fennia, said the scheme had "prepared for the effects of the recession by further emphasising cost-efficiency".

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