DENMARK – Occupational pension schemes are taking a “clearly dominant” position in the pension savings market, says the Danish Insurance Association.

“Pension savings are increasingly placed with life insurers and pension funds at the expense of banks,” the association said in its 2004 annual report. “And occupational pension schemes are gradually achieving a clearly dominant position in terms of contributions.”

“The Danes prefer placing their pension savings with life insurers and pension funds rather than banks.”

It said that contributions to life insurers and pension funds rose by nearly 120% between 1995 and 2003, six times as much as contributions to banks.

Life insurers and pension funds’ market share had risen to 80% from 68% in 1995, with the pension growth coming almost completely from occupational schemes.

Contributions to occupational schemes more than doubled to more than DKK56bn (E7.52bn) in 2003.

The association said: “The Danish pension system has developed substantially in recent decades. Especially the widespread use and extent of occupational pension schemes are remarkable.”

At the end of 2003, the combined assets of life insurers and pension funds were nearly DKK1trn.

Last week ratings agency Standard & Poor’s said Denmark’s “robust” pension system would help it meet the challenge of population ageing.

It said: “The sustained decline in the public-debt burden, coupled with a robust pension system and efforts to boost labour-market participation, should provide for sufficient fiscal flexibility to meet the challenge of an aging population.”

S&P gave a ‘AAA’ rating to Denmark’s forthcoming five-year Euro benchmark bond.