Keva and Ilmarinen – two of Finland’s big three pension funds – this morning revealed investment returns of 10.4% and 8.6%, respectively, for last year, with funding rates consequently reported to have improved at both.
In its 2024 annual results announcement today, municipal pension provider Keva said its total assets increased to €71.5bn by the end of 2024, up from €65.7bn a year before. Returns for individual asset classes over the year included a 14.2% equities gain, 6.8% on fixed income and 1.8% on real estate.
Jaakko Kiander, Keva’s chief executive officer, said: “Excellent investment performance resulted in an increase in the funding rate of the pensions for which we are responsible, besides which there was an improvement in the cost efficiency of our operations.”
Chief investment officer Ari Huotari commented that economic performance had been subdued in Europe last year, but much stronger in the US, while there were mixed expectations for 2025.
“Equities saw another strong year in 2024, but going forward, geopolitical concerns and possible actions by the new US administration are casting a shadow over capital markets,” Huotari said.
For private-sector provider Ilmarinen, total assets grew to €63.3bn by the end of 2024 from €58.9bn a year earlier, according to the mutual pension insurance company’s annual results announcement today.
Jouko Pölönen, Ilmarinen’s president and CEO, said: “The strong solvency and improved efficiency are directly reflected on our clients as lower prices.”
Solvency capital rose to €13.9bn from €12.2bn at the end of 2023, with the solvency ratio climbing to 127.5% from 125.4%, said Ilmarinen, adding that it paid 1% of solvency capital as customer bonuses.
Mikko Mursula, deputy CEO and investment chief at Ilmarinen, commented: “Our return on investments was particularly increased by investments in listed and unlisted shares.”
While stock market returns had been generally positive globally, Ilmarinen said, there had been big regional and sectoral differences.
The pension insurer made a 25% return on its US equities, compared to 9% on European equities and a zero gain for its Finnish equities in 2024, it added.
Overall, equities returned 14.1% during the year for Ilmarinen, fixed income assets generated 4.4%, while real estate made a loss of 0.9%.
Ilmarinen also announced it had beaten its 2030 climate target early, with the carbon intensity of its direct listed equity investments having decreased from the 2020 benchmark by 62% and by 51% for its direct listed corporate bond investments.
A decrease of 50% by 2030 had been the goal, it said.
Mursula said Ilmarinen would update its climate plans this year, and set new targets.
Commenting on the agreement by labour-market parties for a major pensions reform in Finland published in January, Pölönen said it was good the plan allowed for a higher equity weighting in the investment portfolio.
“Naturally, the simultaneous increase in the volatility of returns must be accepted,” he said, adding: “However, the investment horizon for pension assets is decades.”
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Rachel is IPE's Nordic correspondent.
She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere.
In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile
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