The Danish pensions market must become more democratic and transparent if it is to reflect the needs and aspirations of its schemes' members, argues a newly released report by Kirsten Fjord of the country's Pensions Market Council.
The report, for which Fjord was recruited to the council last year by the Danish government in order to lead the pensions debate, criticises the inability of Danish workers to transfer their pensions out of occupational schemes should they be unhappy with the arrangement.
This, Fjord says, is partly due to a labour market restraint which ties in employees to companies through their pensions, but is also indicative of undemocratic and often inappropriate scheme provisions.
Essentially, we need to see greater discussion on pensions suitability between employees and schemes. But this is not happening, partly because suggestion of any change stirs up strong feelings amongst employers."
Fjord also points to a need for improvement in the 'key figures' accounting system adopted by Danish companies two years ago to present their pension fund investment results to employees.
These can be difficult to understand, she claims, and can often be irrelevant to individuals as no comparisons are offered for the figures.
Therefore, the report suggests, a survey of these key figures should be published in which pensions agencies are grouped next to other relevant funds and their members.
Proposals are also put forward for funds to extend information on their investment strategies and in particular any ethical strategies operated, to ensure transparency for members.
" If employees are obliged to pay a certain percentage of their wages to a fund, then they should have adequate knowledge of where this investment is going and how it is performing," Fjord argues.
Carsten Andersen, deputy chief executive of the Danish Insurance and Pensions Association, believes however that such changes are not needed nor being asked for by Danish workers.
"This discussion is being led by groups outside of the pensions sphere, wheras we believe issues of democracy, transparency and member influence are functioning perfectly well as they are, with no complaints from fund members."
Fjord recognises the fact that many Danish funds don't see the need to be more open than at present, and is conscious the report is part of an influencing process: "For this reason we have published five examples of different possible pensions systems, ranging from increased freedom for employees through to private funding based on the UK model. These show ways in which the system can incorporate more democracy and transparency, and we hope they will be taken on board by Danish pension groups," she says.
Torben Moger Pederson, managing director of the Pensionsselskaberne fund believes the report will merely keep the ongoing discussion rolling on Danish pensions: " The report will be discussed and almost certainly stimulate the process of increasing member influence, but this is just one voice on an issue that will involve many more in the future." Hugh Wheelan"