Danish pension administrator Unipension returns 15% in 2010
DENMARK - Danish labour-market pensions administrator Unipension reported returns of 15% or just above for each of the three pension funds it runs for Academics - although property write-downs made a sizeable dent in this figure for one fund.
The company raised the account dividend for the pension schemes for 2011 to 4% after tax, up from 2010's payout of 3.4%.
In Denmark, the account dividend is the voluntary interest rate applied to traditional with-profits pension schemes. Before tax, the 2011 account dividend was 4.71%.
Unipension, which was set up three years ago, manages the Architects' Pension Fund (AP), the Pension Fund for Danish MAs, MScs and PhDs (MP) and the Pension Fund for Agricultural Academics and Veterinary Surgeons (PJD).
MP made a 15% return before the property result and PJD's investments achieved 15.4%, while those of AP returned 15.5% - all before property.
After taking account of property figures, MP returned 13.5%, PJD returned 15.1% and AP had a result of 8.8%.
The AP return included extraordinary property write-downs, which added up to a negative impact of 26.2%.
No one at the pensions administration firm was immediately available to provide a more detailed explanation.
However, Erik Adolphsen, director of Unipension, was upbeat about the results.
"The investment return of around 15% before property is among the best in the sector, and I am very satisfied we have had such a good result again in 2010, despite difficult markets and a big rebound in interest rates in the course of the year," he said.
The company said returns were won as a result of active portfolio management and that high levels of equities and corporate bonds had contributed to the profit.
Most pension scheme members have now chosen to switch from the traditional guaranteed pension product to an unguaranteed pension, Unipension said.
Head of investment Niels Erik Petersen said this was an advantage for investment strategy.
"We can now tolerate big swings in individual years, so we can maintain a long-term investment strategy with a suitable proportion of higher-risk equities," he said.
Unipension manages assets of around DKK75bn (€10bn).