Danish roundup: ATP, PensionDanmark

Danish statutory pensions institution ATP  is increasing its key pension – the ATP Lifelong Pension – by 1.5% from the beginning of next year, reflecting good investment results.

However, it said returns on its bonus reserves had not been high enough to warrant distributing a general bonus to all pension scheme members.

The 1.5% increase, for pensioners only, matches the uprating given this year and that of the year before. 

ATP’s chief executive Carsten Stendevad said: “Based on many years of good investment results, ATP can now increase the guarantees for pensioners for the third year in a row.”

He said this meant the pension fund had given pensioners a rise of 4.5% since 2013.

Explaining its bonus policy, ATP said it was able to increase pensions for all members, both current and future pensioners, when its free reserves amounted to at least 20% of provisions for the pensions it promised.

If those reserves were between 15% and 20% of that amount, then pensions could be increased by 1.5% just for members above pensionable age.

At the end of the third quarter of this year, free reserves were 16.4% of provisions.

It said bonus distribution depended particularly on the development of longevity and the financial markets, as well as how well ATP invests.

Meanwhile, labour-market pension scheme PensionDanmark said it was buying a retail property in the North-Zealand town of Lyngby, incorporating around 16,000sqm of space.

The property – currently leased to the firm Johannes Fog and housing its DIY and home furnishings shop Fog Bolig & Designhuset – consists of 8,807sqm of retail space and 7,400sqm of parking including 265 spaces.

PensionDanmark did not disclose the value of the deal.

Johannes Fog said it was selling the property to focus on core activities.

It said it was making a big financial profit from the sale, which gave it room to develop its main activities further.

Torben Möger Pedersen, chief executive at PensionDanmark, said: “With its location in the centre of Lyngby, the property and the carpark are very attractive.”

At the same time, the pension fund will have a good and stable tenant in Fog, he said.

The pension fund, which managed DKK171bn (€22.9bn) in assets overall at the end of 2014, said it now had a real estate portfolio of DKK15bn divided among commercial, residential, retail and public/private partnership projects.

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