The new ATP law, which includes finely-balanced adjustments to the DKK907bn (€122bn) statutory pension fund’s business model, was approved with no real opposition yesterday in Denmark’s Folketing (parliament), despite earlier supervisory concerns.
Torben Andersen, ATP’s chair, said: “With the new ATP Act passed, we have created a more sustainable business model, which improves the opportunities to be able to hedge members’ pensions in the future and so preserve ATP’s important role as a relevant part of the basic financial security in the Danish pension system.”
He described Tuesday as “an important day for ATP and ATP Lifelong Pension’s members”.
The law was passed yesterday after the third and last reading in the chamber, with 95% of votes in favour, none against, and four registered as neither for or against.
There are many elements to the reform, but most significant are two adjustments to ATP’s current business model.
These are aimed at improving the pension fund’s chances of achieving the best possible pension for members, and preserving their real value, while at the same time sticking with the principle of guaranteed, lifelong pensions – all in the light of expected long-term low interest rates, according to the legislation.
ATP’s hedging strategy is being altered, as is the pension product itself regarding future contributions.
In April, an internal consultation response from the Danish FSA on the proposed legislation for ATP’s business model was published, revealing that the watchdog had several serious doubts about the plan, given the information it had at that point.