DENMARK - Investments at AP Pension returned 5.1% in the first half of the year, while contributions at the DKK50bn (€6.7bn) Danish commercial pension provider rose by around 10% in the period.

Managing director Søren Dal Thomsen said: "Growth of 10% in today's market is a satisfactory result," and added the company was glad the good business development seen last year had continued.

The pension fund said in its interim report that the return on traditional with-profits pension plans was 5.1% for the first half.

Business expanded markedly between January and June, with the level of regular contributions rising by 10.6% to DKK1.8bn. Overall contributions were DKK3.6bn in the six-month period.

Returns on unit-link pension products were affected by big movements on stock markets, AP Pension said, but added that at the end of the period all three profile funds ended with positive results.

Returns on the funds ranged from 2.6% for the low-risk option to 6.3% for the highest risk choice, fully invested in equities.

Reserves grew to 12.1% from 10.7% in the course of the half-year period, while administrative costs fell slightly to 2.0% in the first six months from 2.3%, the pension fund said.

AP Pension is currently in the process of merging with financial sector pension fund FSP. The merger has been approved by both pension funds, but has yet to receive approval from Denmark's financial regulator Finanstilsynet.

In a brief statement, FSP and AP Pension said the amalgamation was progressing well and was well-received by customers. The parties said they expected formal approval from the authorities by the end of September.

Meanwhile, the Danish pension fund for doctors announced it is maintaining its account dividend at 4% despite a pact between the government and the pensions industry earlier this year to impose a 2% cap on such payouts.

Lægernes Pension said the industry organisation Forsikring & Pension (F&P) had confirmed that this decision did meet the aim of the pensions pact, given the overall context.

In June, the Danish ministry of business and growth agreed a package of measures with F&P and Finanstilsynet to address solvency problems in the industry.

These included a change in the way the discount yield curve is calculated and a cap on account dividends of 2% until January 2014.

Lægernes Pension pointed out that the pact also contained an element requiring pension funds to work towards moving customers from guaranteed pension plans to unit-link products with low or zero guarantee.

In a statement, it said that it had been moving away from guaranteed options for "several years".

Nine out of ten scheme members now had the new pension plan with a low, conditional guarantee, it said.

The conditional plan did not put a burden on the pension fund's solvency, and the fund's overall solvency situation was extremely comfortable, it added.

"The account dividend will therefore be maintained at 4.0% until further notice for pensions with a conditional guarantee," it said.

"Forsikring & Pension has confirmed to Lægernes Pensionskasse that this - seen in the light of the pension fund's special plan with a conditional guarantee - fulfills the pension agreement's goal."

Commercial provider AP Pension has already said it would continue to pay an account dividend above this level - paying 4.7% - and arguing it had sufficient reserves to commit to the payment.