Denmark’s Pensionskassen for Farmakonomer, the pension fund for pharmaceuticals experts, is the latest of the country’s smaller pension funds to reject the idea of merging with a big commercial provider. 

The fund insisted that increased regulatory demands for provisions — often cited as a reason the pensions sector will have to consolidate — are manageable for smaller pension funds.

Susanne Engstrøm, chairman of the pension fund, said: “We agree that a regulatory inspection does put pressure on resources, but not more than can be managed even by small organisations.”

She was responding to an invitation earlier this year from Henrik Heideby, the chairman of Denmark’s largest commercial pension fund PFA, calling for smaller pension funds to merge with it, the pension fund said.

Engstrøm said members of the pension fund for pharmaceuticals experts received a very high pension in relation to their final salary and were generally very satisfied with it.

“Our justification hangs on reasonable results and as long as they can be achieved, there is no reason to merge with one of the big players in the market,” she said.

Last month, three other labour-market pension funds came out with a public statement rebuffing suggestions that they should merge with a large provider.

Lægernes Pension, the fund for doctors; DIP, the fund for engineers; and the lawyers’ and economists’ pension fund JØP, said the current debate seemed being more about what different pension providers could get out of the consolidation than about what customers would get out of it.

“Pensions are, in our opinion, much too important to become the object of a competition between different providers’ ambitions for expansion,” the funds said.

They said allowing themselves to be taken over by a commercial company would be “an unusually bad business move for our customers.”

The funds said that although regulatory changes meant increased calls on resources, this was a task they could and would handle.

“We are focussing on earning money for our customers and members — and that is in fact going really well for all three pension funds, all of which deliver a high return,” they said.

Over the last 20 years, the funds said they had outperformed average pension providers by 15%.

JØP and DIP announced at the beginning of last year that they were merging their investment operations after the two departments had worked closely together for years.

The move would ensure lower costs and improved investment knowledge, the funds said.

At the end of 2013, the pension fund for pharmaceuticals experts had assets under management of DKK9.6bn (€1.3bn), while Lærernes Pension had DKK70.2bn, JØP had DKK61.8bn and DIP had DKK33.6bn. 

PFA, meanwhile, manages assets of DKK417bn.