DENMARK – The Danish pensions industry has rejected a government call to make all Danes contribute 10% of earnings to statutory pension fund ATP, saying this would undermine the labour market pensions system.
Per Bremer Rasmussen, managing director of pensions industry association Forsikring & Pension (F&P), said: "A mandatory contribution for all of 10% of wages to ATP would be poison for one of the labour movement's biggest victories in the post-war years – labour market pensions."
He added that it would be interesting to see what kind of pay demand such a change would lead to in the next collective bargaining round.
Bremer Rasmussen was responding to a commentary from Social Democrat member of parliament Mette Reissmann – her party's spokesman on consumer matters – in Danish newspaper Berlingske just before the New Year.
Under the headline 'A little communism in the pensions world, please!', Reissmann referred to a study by ATP in November, which showed there was no clear link between pension funds' investment costs and their returns.
"ATP is a company you can trust," she said. "I can imagine a model where everyone has a mandatory 10% saving with ATP.
"This would ensure solidarity regarding the necessary risk coverage, savings and low costs. It would be much more effective for everyone."
After this contribution, further pension contributions could be made as individuals chose, she said.
Bremer Rasmussen questioned whether Reissmann imagined workers would pay 10% to ATP and then 12% to their labour market pension, or whether she was canvassing for a total dismantling of the current pension system.
"Whichever it is, it is a paradoxical statement from a Social Democrat member of parliament," he said.
He acknowledged the ATP study, but said the 2007-11 period it was based on had been exceptional.
The financial crisis had dominated, and differences between companies' returns had been much wider than normal, he said.
"In a period with a such a decline," he added, "companies with a very cautious investment policy that use a lot of money on hedging look good, and those that invest strongly in business look correspondingly bad."
AP Pension said such plans would undermine the internationally recognised Danish pension system.
Søren Dal Thomsen, managing director of the commercial pensions firm, lauded Reissmann's aim of securing better pensions for Danes, but said the means she wanted to employ were misguided.
It was right that ATP had low costs and produced high returns, he said, but this was true of the pensions sector generally.
"Two big Danish pension funds offered in the press last autumn to administer ATP plans more cheaply than ATP," he said, adding that these offers remained unchallenged.