PensionDanmark raises annual costs
DENMARK - Administration costs at Danish labour market pension fund PensionDanmark will rise next year after staying flat for five years, in part to finance the introduction of a new administration system.
The board of the DKK65bn (€8.71bn) labour market pension fund has set the administration cost per member at DKK387 for 2008, up from a level of DKK363 in each of the previous five years, it said.
Pension fund secretary Jens-Christian Stougaard explained the fund's board recently decided on a policy of setting the level of administrative costs firmly frpm the beginning of the year. "We intend to be on target for 2008," he said.
PensionDanmark said it publishes the figure, or ÅOK (annual costs in kroner), in order to give customers transparency on the price they pay for pensions administration.
"PensionDanmark will start using a new administration and insurance system in 2008" the firm said.
"The investment in the new system is part of the reason why administration costs in the next few years are expected to be a bit higher than in the previous years."
That said, this was not the only reason for the jump in published costs as administration costs per member were kept lower in 2006 and 2007 thanks to rebates of value-added tax (VAT) the fund had paid in previous years, PensionDanmark pointed out.
Cost of the investment in the new IT system will continue to be absorbed for the next 10 years, Stougaard said.
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