Danish roundup: PensionDanmark, Danica, FSP, Lærernes
DENMARK - PensionDanmark is investing DKK175m (€23.5m) in a project to build 87 residential units in a development area of Copenhagen.
The Danish pension fund said it stepped up the pace of its property investment in 2011, with the aim of giving scheme members a stable return at a time of financial turbulence.
The new housing development - Horisonten II - is in the developing city area of Ørestad on the Copenhagen island of Amager.
The property is next to PensionDanmark's existing residential development of Horisonten I, which it says is now fully leased.
Torben Möger Pedersen, managing director of PensionDanmark, said: "With Copenhagen's rapid population growth, there is a huge need to build new homes in the next few years."
Horisonten II will have 8,300 square meters of space and a basement, and is expected to be ready for occupation in 2013.
The contractor is MT Højgaard, architects are Arkitema, engineers are MT Højgaard/Rambøll and the letting agent is Cowi Lejligheder.
"In a time of great unrest on the financial markets and record low bond yields, investments in attractive properties can contribute to growing members' pensions year after year," Möger Pedersen said.
"This is why PensionDanmark has steadily increased its investments in property in the last few years and will continue with this strategy in the years to come," he said.
The pension fund said it planned to boost its allocation to Danish commercial and residential property to at least 10% in 2015 from just over 7% or DKK8.5bn now.
In other news, Danica Pension cut the variable payout it adds to traditional with-profits pensions, saying the debt crisis and other factors meant it must act cautiously and build reserves.
The commercial provider - a subsidiary of Danske Bank - said account dividends for all customers with the Danica Traditionel product would be 1.8% before tax from 1 January.
Investment director Peter Lindegaard said: "The debt crisis and uncertainty about the world economy has led to a marked fall on stock markets and record low interest rates.
"Therefore, we, too, have opted to set a cautious and responsible account dividend. This gives us the chance to rebuild reserves and create the best savings for customers in the long term."
From 1 October last year, pre-tax account dividends on Danica Traditionel accounts ranged from 2.25% to 3.25% depending on the plan's level of guarantee.
Meanwhile, financial sector pension fund FSP has settled its account dividend for 2011 at 3% on an after-tax basis, for all with-profits plans with a guarantee (FSP Traditionel and FSP Gennemsnitsrente Basis).
Basic membership fees will fall in 2012 to DKK804, down from DKK996 in 2011.
The fund said: "The synergies arising from the simplification and reorganisation of the FSP's pension schemes, including the outsourcing to Forca, are now starting to show."
But fees for guaranteed plans will rise. The separate Solvency II fee payable on with-profit plans with guarantees will be DKK996 in 2012, up from DKK200 last year.
Separately, Lærernes Pension announced a 2012 account dividend of 3% after tax - down from the 3.75% set in August last year.
Paul Brüniche-Olsen, managing director of the teachers' pension fund, said: "Our reserves situation is good, and we have no problems honouring the guarantees we have given members."