PensionDanmark in funds transferral move
DENMARK – Industry-wide pension fund PensionDanmark is bidding for a share in the new market of funds transferral from the government-backed SP fund to other funds chosen by workers.
The 37 billion-crown (4.9 billion-euro) scheme is offering its members the chance to have the savings so far deposited with the SP fund transferred over and managed for a monthly fee of two crowns.
In 1998 the government decided to curb private consumption by setting up the SP, to which workers deposit one percent of their salaries. The management of the salaries was delegated to pension fund ATP.
In the meantime, the government has decided to suspend the yearly contribution for 2004 and 2005, resuming it in 2006. Workers have also been offered the option to leave their savings with SP or move them.
PensionDanmark explained its move to IPE saying it made business sense. An official explained the fund was probably the first one in the country to offer the option.
The pension fund, he also said, can afford to give its members the two-crown deal because it is technologically equipped to perform the transferral and therefore will not incur new expenses.
The new money could be used in line with the pension fund’s investment strategies, he said, or members could chose to have their SP savings in a unit-linked format, Frit Puljevalg.
PensionDanmark‘s asset allocation consists of 31% global equities, four percent private equity, seven percent real estate, 10% in high yield bonds, 48% in government and real estate bonds.