Cost-effective and high-quality management of the societal basic task

Responsible management of the pension cover requires cost-effective operations. Cost-effectiveness is a major competitive edge for Ilmarinen and a key requirement in terms of the whole system's sustainability and legitimacy.

We finance our own operations through the expense loading component included in the earnings-related pension contribution. The costs for the investment operations are covered through investment returns. How much money the organisation spends on handling its implementation duties and what results it produces for the benefit of its customers depends on the efficiency of the pension institution's operations. Ilmarinen strives to operate as efficiently as possible and to generate a large loading profit. The more efficiently we are able to operate, the larger the loading profit and the better the client bonuses we can pay. As of the start of 2017, pension companies can return the entire loading profit to their customers.

The indicator used for comparing the operational efficiency of pension insurance companies is the ratio of operating expenses to expense loading components. It describes the company's own operating expenses in relation to the loading income and it also determines the loading profit. In addition, we also measure Ilmarinen's operational efficiency through absolute operating expenses in euros.

The merger of Etera into Ilmarinen at the start of 2018 is intended to further improve cost-effectiveness. Ilmarinen’s Board of Directors set in its merger decision the goal of reducing operating expenses by EUR 20 million by 2020. The savings have been calculated based on the total operating expenses in 2016.

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