DENMARK - Pension contributions in Denmark plummeted last year, falling more than twice as far as predicted, largely because of the public reaction to tax changes, according to industry association Forsikring & Pension (F&P).
Among pension providers, banks were his heaviest by the decline.
F&P - the Danish Insurance Association - said the economic crisis had already been affected pension contributions.
In the spring of 2010, it estimated total contributions would shrink by DKK6bn (€804m) from DKK117bn.
But total 2010 contributions fell by DKK13bn to DKK104bn, F&P said, citing figures from the Danish Tax and Customs Administration.
The tax reform, which took effect at the start of 2010, imposed a ceiling of DKK100,000 a year on payments into a 'ratepension' (fixed-term monthly pension), as well as a lower tax-free allowance for pension contributions.
Carsten Andersen, deputy director at F&P, said: "We are facing some major economic challenges at the moment. Employment has fallen, and with that, contributions to labour market pensions have fallen too. But it is particularly pension schemes at banks that have taken a body blow in 2010."
Contributions to bank pension schemes were down by DKK11bn.
Separately, two Danish pension funds released financial results for 2010.
Lægernes Pensionskasse - the Danish pension scheme for doctors - reported an investment return of 12.4% in 2010 after 19.5% in 2009.
It said it made a profit on interest-rate hedging, but suffered a loss on its equities hedging.
Contributions to the scheme rose to DKK1.8bn from DKK1.6bn, and total assets stood at DKK56bn at the end of 2010, up from DKK50bn the year before.
Pre-tax profit, as a percentage of investment assets, came to 12.4%, while it stood at 11.4% after accounting for equities and interest-rate hedging.
These figures compare with 19.5% and 9.7% for 2009.
Over the year, Lægernes' asset allocation swung slightly toward equities, with the asset class accounting for 56.1% of assets at the end of 2010 from 51.1% at the start of the year. Bonds dipped to 43.9% from 48.9%.
Bonds returned 8% in 2010 and equities produced 24.3%.
Meanwhile, labour-market pension fund PenSam said the group made a "satisfactory" investment return in 2010, helped by equities, bonds and alternative investments, while currency hedging had a negative impact.
The total investment result was DKK4.8bn after DKK1.99bn in 2009.
For the group, pre-tax profit stood at DKK978m after DKK999m in 2009, while the after-tax figure was DKK144m, up from DKK49m in 2009.
Results at units PenSam Liv, PenSam Forsikring and PenSam Bank had made a positive contribution to group results, PenSam said, while its hotel and conference centre subsidiary Bymose Hegn had made a dent in overall profit.
Group total assets rose to DKK63.6bn from DKK53.9bn.