DENMARK - Danish commercial pension provider Nordea Liv & Pension has raised the account yield for its with-profits pension customers to 6% from next year, following "marked growth" compared with recent years.
The account yield is higher than that announced by the company's major rival Danica, the insurance and pensions arm of Danske Bank, which set its yield at 5.5% for 2008 but this time last year, Nordea Liv & Pension set its account yield at 5.5% after tax.
Managing director Cristina Lage said "our solid bonus level makes it possible to raise the return again" which means its customers should get one of the highest returns in the market once more, she added.
In the third quarter, Nordea Liv & Pension increased its bonus level to 14%, the company said which not only made more room for a high account yield, but also opened the way for broad investment for the benefit of customers' future returns, it said.
"In the last few years we have had marked growth," said Lage.
Commercial insurance and pensions provider Topdanmark announced last week it was maintaining its account yield at 5.5% for 2008, for pension customers of its Liv I and Liv V companies.
Labour market pension funds PensionDanmark and AP Pension have both set their account yield for 2008 at 6% after tax.
That said, the account yields paid on labour market pension funds cannot be directly compared to those offered by schemes from the commercial banking sector, such as Danica, Nordea and Topdanmark, which give a minimum guaranteed interest rate as well.
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