DENMARK - Danish pension fund JOEP has scrapped an option allowing clients to make their own investment choices.

Pension fund officials said it appeared Danes were less interested in taking control of their own investments than they had assumed.

Torben Visholm, director at JOEP - the pension fund for lawyers and economists - told IPE only a small fraction of his scheme's members had been interested in the self-invest option on one of its products.

He said: "The scheme was introduced in 2005 under the premise that the costs associated with running the scheme should be borne by the members utilising it. After five years of operating it, we conclude this assumption has not been borne out."

The product in question is the JOEP 'ratepension', an annuity product with fixed maturity that was introduced in 2005.

Scheme members could either manage the investments themselves through a unit-link facility offering 29 different funds, or leave the investment choices to JOEP. 

The 'ratepension' was both a new pension product and an option to self-manage the investments, Visholm said.

However, in 2010, only 570 of JOEP's 40,000 members were taking advantage of the option.

Visholm said there were two reasons why the product proved unpopular.

"First, 'ratepension' is considered a supplementary product on the top of the basic life-long annuity product," he said. "Second, most members prefer to let JOEP invest."

The pension fund will carry on offering the 'ratepension', but from now on it will not include the option to invest through the unit-link facility, Visholm said.

JOEP is not alone in its experience with self-investing - several other Danish pension funds and providers have offered similar products and seen a very small take-up for the option, Visholm said.

"Other funds have had the same experience, that only a very small fraction of members have preferred to manage their investments themselves," he added.