Return on investments of the State Pension Fund of Finland 9.0% in 2024; ten-year average return 5.5%

Press release 13 February 2025
 

The market value weighted return on the investments by the State Pension Fund of Finland (VER) reached 9.0 per cent in 2024 (7.7 per cent in 2023). The real rate of return was 8.2 per cent (4.0 per cent in 2023). 

VER primarily seeks a long-term return sufficient to finance the state pension system. VER’s average nominal rate of return over the past ten years is 5.5 per cent and real return 3.4 per cent. The average nominal five-year return is 5.4 per cent and real return 2.0 per cent.

At the end of 2024, the market value of the Fund’s assets amounted to EUR 24.2 billion (EUR 22.8 billion in 2023). Of all the investments, fixed income instruments accounted for 41.0 per cent, equities 52.7 per cent and other investments 8.0 per cent of the total. The rest of the effect of risk-adjusted allocation was due to derivatives.

VER’s two largest asset classes, liquid fixed income investments and listed equities, gave positive returns in 2024. The return on liquid fixed income instruments was 3.1 per cent and that of listed equities 14.6 per cent. Of the other asset classes, the best performance was put in by private equity funds at 13.4 per cent and infrastructure funds at 13.4 per cent.
 

• 2024 was a good year for investments. Nearly all asset classes generated better-than-expected long-term returns. The best returns were generated by US equities. The weakest performers were real estate investment trusts, says CEO Timo Löyttyniemi.
• The state of the economy and monetary policy contributed to a sound investment market performance. The expectations regarding economic growth remained positive, creating a basis for favourable stock market performance. However, the geopolitical situation continues to deteriorate and create uncertainty, he adds.
• VER’s negative net transfer to the government budget,  meaning the difference of the pension contribution income and the transfer to the government budget, will increase in the future as a result of the amendments to the VER Act and rising pension expenditure. Now the negative net transfer was 2 per cent of the Fund’s assets, but it is expected to increase to 4–5 per cent in the coming years. These factors will limit the Fund's growth in the next few years, says Löyttyniemi.

In 2024, the State Pension Fund of Finland received approximately EUR 1.7 billion in pension contribution income and transferred some EUR 2.3 billion to the government budget. In the same year, VER was required to contribute an amount equivalent to 41 per cent of the State’s annual pension expenditure to the government budget. The amounts to be transferred will continue to increase with the growing pension expenditure.

At the end of 2024, the pension liabilities incurred by the state pension system amounted to EUR 101.0 billion. The funding ratio was 24.2 per cent. The Financial Statements will be adopted by the Ministry of Finance in April 2025.

The Annual Report of the State Pension Fund of Finland is available at www.ver.fi.

Additional information: VER’s Chief Executive Officer Timo Löyttyniemi, firstname.lastname@ver.fi, tel.: +358 295 201 210.

Established in 1990, the State Pension Fund of Finland (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 2024, the market value of the Fund’s investment portfolio stood at EUR 24.2 billion.