DENMARK - Labour market pension fund PensionDanmark suffered a negative return on its investments of -3.9% in the first quarter, hit by steep falls in the international equities markets.

The result was 0.2 percentage points lower than the benchmark set by the scheme, it said in its interim report.

"For the quarter as a whole, the international equities markets fell by more than 14%," said PensionDanmark.

"Similarly, markets for different types of corporate bonds were also market by significant price falls. The strong fall in share prices in particular had a negative effect on PensionDanmark's investment return," it said.

Torben Möger Pedersen, the scheme's managing director, said the positive development of contribution income seen in previous years also continued during the first quarter.

"The rise of 22% compared with the first quarter of 2007 reflects growth in employment in those industrial sectors whose pension schemes are administered by PensionDanmark, as well as general wage increases, rises in the agreed pension contribution rates and larger incoming transfers," he said.

Contributions rose to DKK2.5bn (€330m) in the first quarter, from DKK2.1bn in the year-earlier period while assets under management rose to DKK69.4bn at the end of March from DKK64.4bn in the same period last year.

Costs were down more than 13% year-on-year in the first quarter at DKK74 per member, the scheme said, though it added for the whole of 2008, it expected costs to be on the same level as the year before.