DENMARK - Labour-market pension fund PenSam made a DKK29m (€3.3m) loss on pensions activities last year as a result of one-off restructuring costs including reductions in staff.

The pre-tax loss at PenSam Liv - the pensions and life insurance arm of the PenSam group - compares with a profit in 2010 of DKK141m.

The loss was also due to write-downs on intangible assets, the company said.

The investment return last year for the Tradition with-profits pension product was 15.6% and 2.2% for the Fleksion unit-link plan.

In absolute terms, the return on investments before tax was DKK5.16bn, up from DKK3.77bn in 2010.

Helen Kobæk, director at PenSam, said: “We are very satisfied with these returns, and at the same time, we have been able to give our customers a good, competitive account dividend in 2011 of between 2.35% and 5%.”

The account dividend for 2012 is estimated at between 3.54% and 5.02%, the company said.

Customers in PMF Pension - which is run by PenSam - saw an investment return of 22.9%, while members of the three pension funds run by the holding company had returns of 11.9%, 9.2% and 9.8%. All of these plans are run on a with-profits basis.

Total assets at PenSam Liv rose to DKK60.5bn at the end of 2011, from DKK50bn the year before.

In other news, AP Pension and FSP - the financial sector pension fund - have indicated they expect to see more mergers in the pensions sector in the wake of last week’s announcement that the two funds were joining forces.

In a TV interview, AP Pension managing director Søren Dal Thomsen said: “There could be more mergers. The main thing is about whether you have satisfied customers and how you ensure that you continue to have satisfied customers.

“We will see more mergers that will lead to lower costs and better products, but that requires members to want the merger.”

Separately, the deputy chairman of FSP’s trustee board said it made sense for smaller pension funds to merge with a larger one because of steep competition in the sector.

Michael Budolfsen said: “The pensions industry is marked by rising competition, increased capital demands and more regulation.

“So it is expensive to be a little pension fund like FSP Pension, if at the same time you are offering customers some relatively flexible pension schemes.

“Therefore, it makes a lot of sense to merge with AP Pension, and I hope the general meeting will support this.”

He said other smaller pension funds should consider following suit.

He was speaking in an interview with the newsletter of the Financial Services Union Denmark.

Budolfsen is deputy chairman of the trade union.