Danish schemes maintain account dividends after 'good' year
DENMARK - Denmark's biggest commercial pension providers are holding their account dividends at this year's level, citing good investment results for 2010 as well as the level of reserves.
Danica Pension, which manages assets of DKK296.3bn (€39.7bn), said from January 1, its account dividend would remain at the 2010 level of 3.25% before tax.
Meanwhile, its rival Nordea Life & Pensions kept its account dividend steady at the higher level of 3.75%.
Nordea acknowledged that rising market yields had put some pressure on reserves, but said its bonus reserves were still at a high level. "Therefore we can maintain an account dividend at a continued high level," it said.
Competitor Topdanmark Liv announced it was keeping its account dividend at a pre-tax 3.25% for new pension plans established after July 1994.
"In 2010 we saw a positive development in the result for our pension customers. Against that background we cautiously raised the account dividend 0.6 percentage points to the current level of 3.25% - which we are maintaining for next year," said Jan Hoffmann, director of Topdanmark Liv.
Hoffmann pointed out that the account dividend could be moved up or down during the course of the year.
AP Pension announced an unchanged account dividend of 4.7%. Managing director Søren Dal Thomsen said: "We forecast an investment result so good that we can keep the same high account dividend from January 2011 as this year, and at the same time we can strengthen our reserves."
Labour market pension fund Sampension raised the account dividend on one of its pension schemes but kept it flat on another. Account dividends on plans set up before January 1997 will stay at 2010's level of 4.75% from January 1, while the dividend on those plans set up subsequently will rise to 2.75% from 2.51%.
"The background is the good investment result in 2010," Sampension said.
Lærernes Pension, the labour-market scheme for teachers, said it was lifting its account dividend to 3.75% from 2.5% after tax, citing a "good reserve situation and expectations of a good result in 2010". It did not provide pre-tax figures.
Elsewhere in the non-commercial sector, the occupational pension fund for engineers ISP Pension confirmed that it was keeping its account dividend at this year's 4.75%. ISP Pension has around DKK12bn in assets.