DENMARK - Growth in Danish pensions assets slowed significantly last year because of turbulent financial markets, but asset levels still rose by between three and four percent, according to figures from the Danish Insurance Association, Forsikring & Pension.

A total of DKK2.375trn (€318.5bn) in pensions assets were held in the entire pensions market by the end of 2007, which covers life insurance companies as well as multi-employer pension schemes, corporate pension schemes, banks, the labour market supplementary scheme ATP, the SP scheme and public authority pension fund LD, the association said.

This growth was much slower than in previous years because of commotion on the financial markets, it said.

"In the course of the last 10 years, pensions assets on average climbed by just under 8% per year. One has to go right back to the crisis years of 2001-2002 to find a lower rate of growth in pensions assets than in 2007," the association said.

Strongest growth was to be found in life insurance companies and multi-employer schemes, it said, noting these two types made up just under two-thirds of pensions assets in 2007.

Carsten Andersen, deputy director of Forsikring & Pension, said the growth in assets suggested private pensions were becoming an ever more important cornerstone of the Danish welfare model.

"In 2007 alone, Danes paid more than DKK80bn into life insurance companies and multi-employer pension schemes through their labour market pension," he said.

Labour market pensions are still in an accumulation phase, the association pointed out, which means inflows were significantly higher than outflows to pensioners. Even though rocky financial markets were sending pension scheme returns lower, it said, total assets of the schemes were still rising.

"The area of pensions is a good example of how it is possible over the long term to introduce welfare reforms which unburden the public sector," said Andersen.

"If we didn't have labour market pensions, pressure on public expenditure for pensioners would have been enormous," he said.

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