DENMARK - Seeking to calm fears after one Danish pension fund dropped pledges on returns, Lærernes Pension, the Danish Teachers' Pension Fund, said it would not run away from its guarantees.

The pension fund said: "Recently, the press has written about pension companies that are running away from their guarantees, and which are in danger because they will not be able to manage the new reserve requirements following new EU legislation, the so-called Solvency II rules."

But this did not mean pensions were in danger for the 130,000 members of Lærernes Pension, it said.

The pension fund manages around DKK30bn (€4bn) in assets.

Jesper Brohus, actuary at Lærernes Pension, said: "We have no problems maintaining the pledges we have made. Neither do we have any problems meeting the new Solvency II rules.

"In fact, the new rules mean reserve requirements are lower that those we meet today, and that distinguishes us from many other pension companies in the sector."

Major Danish pension fund Sampension - which manages DKK111bn in assets - is currently waiting for final approval by the Danish Financial Services Authority to abolish the yield guarantees on its pension scheme.

Shedding the guarantees was necessary because of the upcoming Solvency II requirements, Sampension said.

At Lærernes Pension, head of investment Morten Malle said the new rules from the EU required companies to be able to manage a "storm of hurricane strength" on the financial markets.

"If you have shares in the new markets - i.e. outside developed countries - you have to be able to handle a fall of up to 59%," he said. "We can handle that, and therefore we are continuing to invest in the new growth markets."

Lærernes Pension was able to carry on investing with a long-term perspective and a good spread of investments, for the benefit of return and stability, Malle said.
 

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