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Nordic roundup: PFA, AMF, Industriens Pensions

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Denmark’s largest commercial pension provider PFA Pension has said its Danish equities investments have returned 18% since the beginning of this year, or DKK2.8bn (€375m) in absolute terms.

It said it expects Danish equities to generate double-digit returns this year as the weaker krone helps exporters’ profitability.

Jesper Langmack, director at PFA’s investment arm PFA Asset Management, said: “We have seen some excellent results from a range of the biggest Danish companies.”

He said the pension fund expected this full year to be one in which there was once more double-digit growth in Danish stocks.

“The Danish krone has become substantially weakened relative to foreign currencies,” he said.

“It strengthens the Danish companies’ competitiveness, and it gives an advantage to companies that have a large proportion of their earnings in foreign currency when they have to convert it into Danish kroner.”

Meanwhile, Swedish pension fund AMF reported a rise in returns to 12.7% for 2014 from 9.3% the year before, on the back of falling bond yields and rising equities prices.

But contributions into the scheme for traditional pension products fell during the year, the fund said, explaining that this drop was in line with its strategy of focusing on core business.

Contributions into traditional with-profit plans fell 8% to SEK14.6bn (€1.6bn) in 2014 from SEK15.9bn in 2013, the fund said on publishing its annual report.

This fall was mainly due, it said, to lower premium flows through intermediaries as a result of the fact it had stopped doing commission-based business.

Johan Sidenmark, managing director, said: “AMF began 2014 with strategic work focusing on reducing complexity and lower costs.

“As the first company in the industry, we are conducting extensive work to aggregate insurance with the same or better conditions in order to simplify things for our customers and enable further fee reductions.”

Overall profit at the AMF group fell to SEK19.7bn in 2014 from SEK47.6bn, the fund said, explaining that changes to the discount rate used to re-evaluate liabilities meant SEK29.7bn had been taken away from this figure last year, while the rate had added SEK13.6bn to the figure the year before.

Total assets under management grew to SEK508bn at the end of December from SEK450bn a year before.

Administration costs were trimmed to 0.13% by the end of 2014 from 0.16% a year before.

In other news, Industriens Pension saw a high level of transfers out of its scheme into other schemes during 2014, according to the Danish labour-market pension fund’s annual report.

Overall, membership numbers fell in 2014 as a result of an extraordinarily large number of passive members having transferred their savings to other pension providers, Industriens Pension said.

Total membership dropped to 396,403 from 404,631.

The number of passive scheme members fell to 154,126 in 2014 from 167,669 at the end of 2013.

A spokesman for Industriens said the high volume of transfers out during the year was due to a tax anomaly that had forced members wishing to transfer their savings to wait until they had been compensated for double taxation on part of the total.

He said the annual transfers out had corresponded to an equal number of transfers into the Industriens scheme from other providers.

In the report, the scheme said the number of scheme members actively paying in had risen by 12%, or 3,040 members. 

This growth followed a period of falling membership numbers, it said.

“The increase should be seen in the context of the favourable development in employment within the industry,” it said.

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