Finland's government plans larger transfers from state pension fund, prompting risk warnings

The Finnish cabinet has submitted a bill to the parliament that would increase the yearly transfers from the State Pension Fund (VER) beginning in 2027, adding to a previously approved one-off transfer of roughly €1 billion for next year. Under the proposal, annual withdrawals would rise to between €190 million and €211 million above one outlet law for the 2028-2037 period, and to about €100 million per year from 2038 onward, eventually representing 48 % of the state's annual pension expenses.

Antti Suhonen, the fund's CEO, warned that the cumulative effect could halve the fund's risk buffer, reducing it from around €12 billion to €6 billion, which would constrain its capacity to hold riskier assets such as equities. He noted that a smaller buffer may lead to lower equity exposure and potentially reduce the fund's asset base by €3-4 billion over ten years compared with a higher-risk strategy. While the fund does not directly pay pensions, a shrinking asset base would require the state to fund a larger share of pension liabilities from other sources.