DENMARK - Denmark's pension schemes need to be clearer about the money going in and out of the "common fund" of traditional with-profits schemes, warned economics and business affairs minister Bendt Bendtsen.
He also said labour market pension funds needed to do more to give people more choice in their pension savings.
"When it comes to openness regarding costs, I have said it before. The main thing for me is that customers are told what they are paying for, how much they are paying and whom they are paying," Bendtsen told the annual meeting of Forsikring & Pension, the Danish Insurance Association yesterday.
Commenting on the association's move at the end of last year to issue a set of voluntary guidelines for pension providers - to show their customers the real cost of products - Bendtsen also said: "The initiative is quite certainly a big step in the right direction. But I don't believe that we have yet reached the goal. However, I am sure we have a common interest in traveling the last stretch," he added.
A solution still needs to be found concerning the collective bonus-potential of traditional-style with-profits pension schemes - the 'so-called' common fund, he said.
"There is a need here for more clarity on the movements in and out of the common fund," he said, but conceded this was a complicated area with no easy solutions.
"But we will find a solution - we owe that most of all to the customers," he said. "On the other hand, it is clear that we should find a solution which is both durable and robust. The Financial Supervisory Authority is continuing to work on the models we have on the table."
Bendtsen said he was pleased the association had fulfilled the government's request for the creation of greater choice in pension savings.
A study of labour-market pension schemes showed three out of four schemes had increased choice for their customers since 2003, he said.
"This is pleasing. But we have not reached the endpoint. I would like to see the journey towards more choice that has started continuing. So I urge continued focus in this area," he said.
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