Danica ups payouts by 22.5%
DENMARK - Danica Pension, the insurance and pensions arm of Danske Bank, is raising the account yield on its core pension product to 5.5% after tax in 2008 from 4.5% this year.
Danica Pension's managing director Henrik Ramlau-Hansen said the company decided to step up the return it gave customers on their savings in its "Danica Traditionel" product because of the strength of the organisation's capital base, a satisfactory level of bonus and higher interest rates.
"At the same time, we have increased our equity investments in the last couple of years, which will also benefit returns in the longer term," he continued.
Before tax, the account yield or income for Danica Traditionel customers is 6.5% next year, compared with 5.3% in 2007.
Labour market pension funds PensionDanmark and AP Pension have both set their account yield for 2008 at 6.0% after tax. However, the account yields offered on labour market pension funds are difficult to compare with those of schemes from the commercial banking sector - such as Danica Pension - because the guarantees they offer are different.
Other Danish pension providers are expected to announce their account yield for next year later this month.
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