DENMARK - PensionDanmark, Denmark's largest labour market pension fund, has fixed the long term pension savings interest rate for 2006 and preliminary for 2007 to 6% after tax, the fund announced today.
Over the period starting from 2003, PensionDanmark has given its members an interest rate of 29.4% on their savings to lifelong age-pension, according to the fund.
"This is high in comparison to the many commercial firms that give 4.5% each, year which have given a combined interest rate of 24.6%," a spokesman for the fund said.
PensionDanmark's interest rate on the savings for life long pensions is set to be stable year by year as compared to a market rate pension product where the return varies with the market return, the spokesman explained.
Torben Möger Pedersen, the fund's acting manager, said that PensionDanmark's "satisfactory" investment returns of the past years are now "being passed on to the members in the form of this high interest rate".
According to the spokesman the fund performed well due to a high degree of freedom in investment policy: "We don't have any interest rate guarantees for members, we don't have any minimum yield on the return for their life long pension and because of that we have a high degree of freedom in our investment policy."