DENMARK - Industriens Pension, Denmark's DKK46.7bn (€6.25bn) industry-wide pension fund, has set its account yield at 6.5% after tax for 2008, despite a fall in investment returns.
The scheme set the rate it gives members on their pension savings at 5% this time last year, though it then announced in March that it was lifting this to 6.5% following good 2006 results.
"Even though the return on investments is somewhat lower than in previous years, Industriens Pension has decided that members should have an account yield of 6.5% in 2008," the scheme said in a statement.
"Industriens Pension has achieved an average return of 9% a year after tax since the beginning of 1993," explained managing director Erik Adolphsen. "That is quite a bit more than we have given in account yields. Therefore, over the years we have built up very significant reserves," he said.
Separately, Finanssektorens Pensionskasse (FSP), the Danish pension fund for financial sector employees, set its 2007 rate of interest on policyholders' savings at
6% after tax, up from 5.5% in 2006.
FSP pointed out its normal practice is to announce the interest rate late in the year, once it has a solid picture of the results and investment return.
The pension fund commented competition for pension customers had increased in Denmark this year, after several years of pension providers sticking to an account yield or interest rate of 4.5%.
"Now at the end of the year, when account yields are in focus in the media, some pension providers are giving their rate an extra boost," it commented.
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