State Pension Fund earns -0,8 per cent return on investments

Published 2016-08-25 at 11:41

The return on the assets invested by the State Pension Fund (VER) was -0.8 per cent during the first quarter. VER’s average rate of return is 5.5 per cent for the past five years and 4.1 per cent for the past 10 years.

At the end of March 2016, the market value of the Fund’s assets amounted to EUR 17.6 billion (EUR 17.9 billion on 31 December 2015). Fixed income instruments accounted for 47.9 per cent, equities for 42.8 per cent and other investments for 8.0 per cent of VER’s all investments.

  • During the first quarter, the markets were ruffled by speculations about three things: growth, China and central banks. The first few weeks of the year in particular saw a historically weak equities market. Even though the markets recovered quickly, the return on equities remained in the red, says Managing Director Timo Viherkenttä.

  • Fixed income instruments proved a bright spot with a two per cent return despite the extremely low interest rates at the beginning of the year. The recovery of the equities market that started in February was sustained into the second quarter, he continues.

The pension contributions received by VER during the first quarter are estimated at EUR 356 million. By the end of March 2016, the State Pension Fund had transferred to the government budget a total of EUR 446 million. Under the Act on the State Pension Fund, VER is required to contribute to the government’s annual budget an amount equivalent to 40 per cent of the state’s total pension expenditure. At the end of 2015, the state’s pension liabilities amounted to EUR 95.7 billion, while the funding ratio was 19 per cent.

Further information:

Inquiries: CEO Timo Viherkenttä tel.: +358 9 2515 7010.

Established in 1990, the State Pension Fund (VER) is an off-budget fund through which the state prepares to finance future pensions and equalise pension expenditure. VER is an investment organisation responsible for investing the state’s pension assets professionally. At the end of 2015, the market value of the Fund’s investment portfolio stood at EUR 17.4 billion.

All the figures presented in this press release are preliminary and unaudited.