The pension reform, which was agreed on in January 2025, will enter into force on 1 July.
– The pension reform is significant as it focuses on investment regulation. It strengthens the system by providing more leeway in investment activities and improving the conditions for pursuing long-term returns. Varma has carefully prepared for the change, says Varma’s President & CEO Risto Murto.
The reform enables private-sector earnings-related pension companies to pursue better returns on their investments. Also the funding of earnings-related pensions will be strengthened. The goal of the reform is to reduce the pressure to raise earnings-related pension contributions going forward. Pension benefits and contributions will not be affected by the reform.
– The lively debate regarding the retirement age and cuts has reflected the pressure to find quick solutions for the state budget. However, the pension system operates on a decades-long time span. It is vital that a long-term perspective remains the starting point for developing the pension system in the future as well, stresses Murto.
The reform will take place in three stages
The solvency regulations for earnings-related pension companies will be relaxed in three distinct stages so that pension companies can raise their investments’ risk in a controlled and responsible manner. Following the reform, annual variations in returns may be greater than before the reform, but the long investment horizon will level off the variations.
– Although the change in investment regulation is significant, it continues on the same path that earnings-related pension companies’ investments have evolved over the past decades. Our strong solvency offers us flexibility to make the changes on a schedule of our choosing, in accordance with our investment strategy and taking market conditions into account, says Deputy CEO Markus Aho.