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real investments. The yields from real estate investments were Annual Report of the Board
enhanced, in particular, by the higher valuation of certain specific
residential properties. Especially the yield from forest investments Seafarers’ Pension Fund 2020 Annual Report
was high, over 20%, as a result of the sales transactions in early 2020
and the upgraded forest growth models. The overall return on equity 1133
investments was 6.4% and on fixed-income investments 0.9%.

The Seafarers’ Pension Fund has affirmed the principles for
responsible investments and is a member in Finland’s Sustainable
Investment Forum (FINSIF).

Information Systems

In August 2019, a major system reform was initiated in order to
upgrade all of the operational pensions systems of the Seafarers’
Pension Fund. The Pension Fund will take into use the calculation
service software (Lapa) which is widely applied in the earnings-related
pensions field, and accordingly, the processes related to the handling
of pension applications as well as the management and payment of
pensions will be renewed. At the same time, the customer portals
(Ankkuri and Loki) as well as the external website will be updated. The
new systems will be launched during the year 2021.

The reform of the financial administration system began in 2020
and the intention is to launch the new system during 2021.

Risk Management

The Seafarers’ Pension Fund has a risk management plan in place,
which covers all its operations and is reviewed on an annual basis. The
plan includes the assessment of risks related to the Fund’s operations,
their probabilities and potential impacts on the Fund’s operations. The
Fund has also prepared, as part of its strategic decision-making and
risk management, a risk and solvency assessment in compliance with
Section 184a of the Seafarer’s Pensions Act (MEL). The assessment
includes a review of the impacts of all essential risks on the operations
of the Pension Fund as well as those measures that are relevant for the
purposes of managing these risks.

As required by the Financial Supervisory Authority, the Board
shall approve the manner in which the Seafarers’ Pension Fund will
implement its annual risk and solvency assessment. In its meeting on
22 October 2020, the Board discussed the risk and solvency assessment
for 2020, which was commissioned to Danske Bank. The assessment
for 2020 was expanded by adding a section concerning the liquidity
risk, in addition to the solvency risk analysis.

By virtue of the law, the Seafarers’ Pension Fund shall conduct, every
second year, an actuarial study to investigate whether the currently
valid MEL contribution basis is securing in terms of the Pension Fund’s
solvency and the interests of the insured. In practice, the study is carried
out every year, and the confirmation of the MEL contribution by the
Ministry of Social Affairs and Health is applied for one year at a time.

The Administrative Regulations of the Seafarers’ Pension Fund
became valid on 1 December 2017.