Denmark opens SP to Ucits investment
The Special Savings Pensions Scheme (SP) to which all Danes contribute one percent of earnings, will offer wider options as to how the assets can be managed, as from 1 January 2005 (page 9 News analysis).
According to ATP the Supplementary Labour Market Supplementary Scheme, which runs SP currently, expects the changes to result in the country’s largest unit-linked type scheme.
The DKr43bn(E5.8bn) SP fund will enable the 3.3m account holders to transfer their assets to a range of Ucits funds, transfer the SP account to another pension fund, or let ATP, which currently invests the money continue to do so.
Foreign asset mangers will be able to place their Ucits funds into the new ‘Folkeboersen’ (People’s stock exchange), an internet-based system being set up by ATP and operated through the Copenhagen Stock Exchange, have until 1 July to register their funds with the Danish Financial Supervisory Authority.
ATP, which points out that the funds have to be GIPS compliant, says there has been significant interest from foreign groups in participating in the Folkeboersen.
The wind has been slightly taken out of the sails of the new arrangement, as the Danish government has recently announced that the one percent contribution has been suspended for the next two years, in order to stimulate demand in the economy. But ATP points out that the existing assets in the scheme will be transferred into the arrangements.
If the Danish public do not actively choose new Ucits funds, they will go into one of three new ATP Ucits, with different asset allocations according to the age of the account holder.
As from 1 July 2005, the 1.1m Danes holding accounts with LD fund – Lonmodtagernes Dyrtidsfiond, to which they contributed in 1970s as an anti-inflationary move for some years - will be able to move these assets into the Folkeboersen, among other options. This fund holds Dkr54bn (E7.3bn).