The country's parliament yesterday voted in favour of a law effectively combining existing investment and insurance risk buffers – creating strengthened solvency reserves for pension providers.
Reijo Vanne, head of economic analysis at TELA, the Finnish Pension Alliance, said that the use of the two buffers did not change under the new law; they were now simply counted jointly when examining the financial health of a company. Opposition parties argued that pension providers had amassed too large an insurance buffer – used to offset capital losses in a low-return environment – and that contributions should therefore be lowered.
Vanne said the industry was happy with the level of risk it was allowed to pursue, so it was positive the government did not introduce any changes that could have necessitated the sale of equity or a shift towards fixed income. The concern over a shift in investment strategy was shared by the chief investment officer of one of the country's medium-sized pension companies.
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