Danish labour-market pensions provider PenSam Liv’s investment return before pensions tax according to the official N1 measure fell to 2.2% in 2015 from 10.8% the year before. 

In its 2015 annual report, PenSam said alternative asset classes produced a return of 11% for the year.

The pensions provider said its investment strategy allowed for active management and new elements such as direct lending to commercial businesses and new models within real estate investment.

These were initiatives that won international recognition again in 2015 and created good returns, it said.

In absolute terms, profit before pension tax for PenSam Liv – the life and pensions segment of the PenSam group – shrank to DKK1.8bn (€241m) in 2015 from DKK8.0bn in 2014.

Costs per member fell to DKK517 in 2015 from DKK586.

Helen Kobæk, chief executive at PenSam, said: “The development regarding costs is good, but our ambitions go further.”

She said the group’s plans to split PenSam Liv and then spin PenSam A/S off into an independent company would help improve efficiency across the group.

While the lion’s share of PenSam Liv’s customer savings remains in the older guaranteed Tradition pension product, at 49% in 2015, the balance between funds in this product and funds in the newer Fleksion product, which has no yield guarantees, evened out further last year.

Fleksion now accounts for 45% of customer savings, up from 43% last year and 31% in 2011.

The lack of yield guarantee allows investment to be more flexible, which increases the chances of making high returns, PenSam argued.

Total assets at PenSam Liv grew to DKK98.9bn at the end of December 2015 from DKK96.9bn a year before.

Premiums grew to DKK5.3bn from DKK5.1bn.