Strong investment returns and record results over the past three years mean that ATP, Denmark’s biggest pension fund, is increasing the pensions of all its members by DKK30bn (€4bn).
The increase is the largest in ATP’s history and provides all its members – which stand at more than 5 million – a lifelong and noticeably larger pension, the scheme announced.
“It is very gratifying that ATP continues to deliver such strong results on the investment side. Our financial results over the last three years in particular mean that we have the finances to raise payments by an unprecedented amount of billions, which benefits all our members,” said Bo Foged, ATP’s chief executive officer.
In its financial report for the nine months to the end of September, the pension fund revealed its overall assets rose to DKK927.5bn from DKK925bn at the end of June, after a DKK6.1bn return on its investment portfolio.
“For almost 40% of the pensioners in Denmark, ATP Livslang Pension is their only pension supplement to the national pension, so this is a boost that means something to many, many thousands of pensioners in Denmark for the rest of their lives,” he added.
ATP Livslang Pension is a benefit that covers almost everyone in the Danish labour market. Every year, ATP pays out more than DKK17bn in pension payments to its members, and that number increases by approximately DKK700m per year.
ATP’s board of directors has now decided to increase that payment by 4% – amounting to the DKK30bn – which is taken from the scheme’s reserves.
Foged said that ATP “can afford it because our returns have been so extremely good for several years that our total assets today are over DKK900bn”.
He added: “It is the members’ money that we invest, and we are very aware of the declaration of trust from the Danes.”
For an average 66-year-old pensioner the increase means that the ATP pension grows by just over DKK14,000 in total for the remaining part of the member’s expected life expectancy.
The last time ATP increased pension payments for all members was in 2017, when all pensions were raised by 1%.