Denmark Investment and Pensions

Denmark’s labour-market pension system has grown to around DKK4trn (€530bn) and is managed by sophisticated institutional investors such as PFA, Danica and PensionDanmark. Through their industry association, Insurance & Pension Denmark (IPD), they have lobbied domestically for more public-private investment opportunities – with appropriate risk sharing – in local infrastructure. State entity ATP, meanwhile, manages the mandatory population-wide supplementary labour-market pension scheme of the same name, which is backed by an ever more complex hedge fund-like investment operation. As the labour-market pension funds have moved away from guaranteed pension products towards market-rate pensions, ATP has had to defend its low-yielding guaranteed scheme in the face of criticism. The Danish pension system regularly ranks among the top three in the Mercer CFA Institute Global Pension Index study, but debate continues domestically about how it should be tweaked. Some call for more leeway around contributions, allowing pauses during child-rearing years; others would like more flexibility in the payout phase and there is disagreement on whether Danish pensions are inadequate or too generous.