EUROPE - Returns on with-profits plans at PFA Pension rose to an average of 11.3% last year, but those on unit-link products were lower year on year.
PFA Pension group chief executive and president Henrik Heideby said: “We have now had a positive investment result for the last 10 years. All asset types apart from equities produced a positive return in 2011.”
The traditional with-profits pension returned 11.3% on average, according to the provisional results, with actual returns for customers between 8% and 16% depending on the age group.
In 2010, traditional plans returned an average of 8.5%.
The unit-linked product PFA Plus produced returns of between -6.6% and +6.1%, depending on risk profile and the number of years to go until retirement.
In 2010, PFA unit-link returns ranged from 10%-20%.
Anne Broeng, group director at the customer-owned pension fund, said the investment returns had been achieved through active management and good diversification.
“We are very satisfied with our profit in a year that has been particularly difficult,” she said.
In absolute terms, the group’s total investment return was DKK27.3bn (€3.7bn) last year. At the end of June 2011, PFA reported assets under management of DKK289bn.
Around 5% of customers’ savings in PFA are treated as capital, or KundeKapital, and the return on this part was 12% in 2011, it said. This compares with 12.3% the year before.
Meanwhile, the Danish pensions industry has now committed DKK4.8bn to the state-sponsored venture capital fund Dansk Vækstkapital - almost completing the DKK5bn that was originally intended, the pensions industry association Forsikring og Pension (F&P) reported.
Peter Damgaard Jensen, chairman at F&P, said: “Dansk Vækstkapital has worked most professionally as well as effectively and now has the capital foundation is good as in place.
“Now the task is to get the large sum of money out there and working, so Danish growth businesses can receive a solid shot in the arm in the form of venture capital, which is a scarce commodity in these times.”
It is now a year ago since F&P, supplementary labour-market fund ATP and the previous Danish government signed the agreement to set up the fund.
The government’s aim was to provide a source of funding for entrepreneurs and small and medium-sized businesses at a time when bank finance was in short supply.
“The whole Danish pensions industry is aware of its social responsibility and is happy to contribute to the creation of growth, as long as they can secure a reasonable balance regarding profits for pension savers,” Damgaard Jensen said.
Lastly, data for 2011 revealed strong returns for Danish bond investment funds, but a huge variation in the profits of their equity-based counterparts.
The Federation of Danish Investment Associations (IFR) reported the typical Danish bond unit returned 7.7%, which it said was the highest result for the asset class since 2002.
Equity-based units, on the other hand, were hit by the global financial turmoil.
The typical equity-based investment fund share returned between -25% and +7%, IFR said.