Two Danish pension funds run by Sampension have lodged an appeal against the decision made by the Danish FSA (Finanstilsynet) to ban them from switching their customers from average-rate to market-rate pensions schemes without getting individual consent.

A spokeswoman for Sampension confirmed to IPE that the pension fund for architects, AP (Arkitekternes Pensionskasse) and the pension fund for agricultural academics and vets, PJD (Pensionskassen for Jordbrugsakademikere & Dyrlæger) had appealed the watchdog’s decision just before Easter.

The appeal was made to the commercial appeals board after the financial regulator’s ruling last month that they could not switch all pensions to a market-rate basis from a conditionally-guaranteed average-rate set-up.

The boards of the two funds hold the view that the decision should be made at their respective annual general meetings in the form of a collective vote. But the FSA ruled at the end of March that such a collective change in customers’ pension products would be violating good practice if the funds failed to obtain individuals’ consent.

Average-rate or with-profits pension products — with or without yield guarantees — used to be the norm in Denmark until recent years. They involve the provider smooting investment returns on an individual’s savings from year to year, and carry high capital requirements. 

Most funds have switched, or are switching, most savers to market-rate or unit-linked products, in which an individual bears financial market risk directly.