DENMARK - Around 700 members of Denmark's MP Pension claim they feel cheated of their investments and are calling for a fresh election concerning their interest rate guarantee.
Members of DKK52bn (€6.97bn) MP Pension, created in 1960 for academics at universities and upper secondary schools as well as psychologists, are disputing the result of an election held on 1 October which members suggest will change their pension plan to a more risky scheme, and are therefore calling for the vote to be retaken.
Approximately 93% of its 65,000 members are understood to have voted in favour of proposals to reduce the interest earned guarantee to just a 1.5% - a move which which MP said would deliver a simpler and more equal scheme to members, as it would pay less towards the end of its life but give them more or less the same amount of money in a lifetime.
MP Pension is maintaining the vast majority have said yes to the move, and the vote is therefore legally binding.
However, the Danish Financial Supervisory Authority appears to be backing the members in dispute concerning their right to forgo higher protection.
Members have also received expert guidance claiming members were given the wrong impression about the risks behind the new higher-risk scheme, and the FSA has therefore said it is technically feasible to undo the election.
Through the poll, MP persuaded over 60,000 members to renounce their right to receive up to 4.25% in interest and would instead receive 1.5% from 1 January 2009.
But it has been claimed information about any drawbacks and the increased risk was almost non-existing in the election brochures as Kim Valentin, financial adviser from Finanshuset in Fredensborg, pointed out MP's pension brochure does not show the high risk which comes with the new pension plan.
Moreover, when a large group of members protested, they were told they would not allowed to alter their choice even though the money will not be moved until the 1 January 2009, according to Lars Kalsen, a customer of MP Pension, who along with 700 other members is pushing for an extraordinary general meeting to tackle the issue.
"It seems as if someone is trying to manipulate us to take a particular decision," he claimed.
Kalsen said a letter from the FSA informed him members can legitimately go back to the old system as the change is yet not put in force.
However, Jytte Freisleben chairman of the MP Pension, says "the cooling-off period of 14 days is exceeded, and that the election the members have taken is legally binding".
She said she believes the lower return has already helped during the financial crisis, and will benefits all members.
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