Our pension system ranked eighth in the international Mercer CFA Institute Global Pension Index comparison. In terms of governance reliability, Finland was still the best in the world.
Our pension system is, in fact, better and more sustainable than its reputation suggests.
The decision made at the beginning of the year to start reforming the pension system was, in my view, a good one and helps safeguard, among other things, intergenerational equality in pensions.
The most significant change in the reform would involve the possibility of increasing investment risk, meaning a higher equity allocation in pension fund investments. Naturally, the expectation is that returns will be higher.
The total amount of pension system investment assets at the end of June 2025 was €272 billion.
The alternatives to increasing risk and expected returns would have been higher pension contributions or cuts to pension benefits.
The greatest threat to the system, in my opinion, is politicians.
Some of them seem to forget that this is not tax money for the state but contributions paid by employees and employers. When public finances are tight, the billions in pension funds are tempting.
Of course, there is also the risk that investment risks materialize—but then the world has much bigger problems.
The most reliable guarantee for the pension system, as well as the enabler of Finland’s overall well-being and stabilizer of public finances, are performed high-productivity working hours. We need more of these hours. That means both the state and companies must invest in education, research, development and innovation, as well as educational and work-based immigration.
This article was previously published as the editorial in TEK Magazine issue 5/2025.
