Page 7 - Seafarers---_Pension_Fund_Annual_Report_2020_s

Annual Report of the Board

Seafarers’ Pension Fund 2020 Annual Report

DReelvaetleodpPmeennstioonf SthyestEeamrnings- for entrepreneurs insured under the Self-employed Persons’
Pensions Act (YEL). The Financial Supervisory Authority
Since the reforms in 2016, the seafarers’ pension system initiated an industry-wide thematic evaluation targeted at
has been quite similar to the earnings–related pension actors that grant YEL insurance policies. This does not affect
scheme in general. The pension reforms implemented at the operations of the Seafarers’ Pension Fund.
the start of 2017 were applicable to the system governed
by the Seafarer’s Pensions Act (MEL) as well. For old-age The preference of an electronic pension record over a
pension, the lowest pensionable age rose in 2020 by three pension record in paper format is being investigated in the
months so that those born in 1956 could retire with old- field. The Seafarers’ Pension Fund is also looking into the
age pension at the age of 63 years and 6 months. Within possibility of transferring to primarily electronic pension
the seafarers’ pension system, the possibility to retire at records.
a lower individual old-age pensionable age remains valid
until the end of 2024. Result and Solvency

The life expectancy coefficient confirmed for the year The overall result of the Seafarers’ Pension Fund for the
2020 was 0.95404, and accordingly, the commencing year 2020 was positive at EUR 20.5 million. The result
pensions were cut by approximately 4.6%. is comprised of the result of the insurance business, the
result of investment activities, government shares and
The role of the Seafarers’ Pension Fund as the field- administrative expenses.
specific pension provider has remained unchanged, and
its development is linked with the development of Finnish For the Seafarers’ Pension Fund, the return on invest-
navigation. ments was 6.2% and the real return 6.0%. The net invest-
ment income at current values totalled EUR 73.8 million.
In recent years, the earnings-related pension system
has become more centralised, and as a result, there are The solvency ratio, that is, the ratio of the solvency
currently only four pension companies in Finland. In capital and the technical provisions used in the solvency
2020, preparatory work continued with the intention calculation, was 182.0% at the end of the year (176.1%
of clarifying the possibilities for merging the municipal in 2019). The Fund’s solvency is still strong and one of
pension scheme with the private-sector pension scheme. the best in the field. The solvency capital was 3.22 times
the solvency limit. In euro, the solvency capital increased
According to the Finnish Financial Supervisory Authority, by EUR 41.8 million from the preceding year and totalled
there is some uncertainty regarding compliance with the EUR 564.9 euro at the end of 2020.
valid regulations in the implementation of pension security

Net investment return on capital employed

Net investment income Capital Return on Return on Return on
at current values employed capital capital capital
MEUR MEUR employed, % employed, % employed, %
2020 2020 2020 2019 2018

Fixed-income investments, total -1.5 66.7 -2.2 2.7 -0.1
Loans 0.2 5.4 4.1 3.2 3.2
Bonds -1.7 9.6 -17.9 11.2 -2.5
Other money market instruments and deposits 0.0 53.7 0.0 0.1 0.3
Equity investments, total 27.0 603.8 4.5 18.2 -0.6
Listed equities 26.0 350.6 7.4 24.9 -8.1
Private equity investments 1.0 253.1 0.4 9.5 10.8
Non-listed shares 0.0 0.1 3.6 0.0 0.0
Real estate investments, total 32.0 345.0 9.3 2.7 2.4
Direct real estate investments 29.7 300.4 9.9 2.3 2.4
Real estate funds 1.4 44.7 3.0 6.0 6.2
Other investments 17.3 173.8 9.9 5.1 4.0
Hedge fund investments
Commodity investments 13.4 59.1 22.7 8.9 2.8
Other investments 3.9 114.7 3.4 3.0 4.7
Total investments 74.8 1 191.2 6.3 10.9 0.9
Unallocated income, expenses and operating costs -1.1
Net investment income at current values 73.8 1 191.2 6.2 10.7 0.7

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