Pædagogernes Pension (PBU), the DKK68bn (€9bn) Danish pension fund for educators, is predicting that the economic downturn caused by the COVID-19 outbreak will be severe but short-lived.

The mutual pension fund, whose members typically work in kindergartens, said in a commentary on the uncertainty about the economic impact of COVID-19 that there was a good opportunity for the global economy to get back on track relatively quickly, supported by economic aid packages.

PBU said in the statement: “Although it looks black on the stock market right now, it is too early to say how things will go for members’ savings this year.

“We expect the comprehensive measures to be taken as a result of coronavirus (travel restrictions, school closures, etc.) to be temporary and that the downturn in the global economy will be short-lived despite the severity,” it added.

The pension fund said that although the rapid global spread of COVID-19 had lead to great uncertainty in the markets, it took major fluctuations into account when planning and implementing its long-term investments.

Share prices had fallen significantly since their last peak on 19 February, PBU wrote, and while prices for safer bonds had risen slightly in that time, overall both factors had had a negative impact on the educators’ pension savings.

But PBU told its members they should not be worried about their pension savings.

This was especially true for young people, the pension fund said, because they had many years to make up for periods of loss.

Older members had a shorter time to go before retirement, it said, but their savings were invested more prudently and were, therefore, less prone to falls in the stock markets.

“Of course, we are following developments very closely and continuously adjusting investments so that the portfolio remains robust,” said PBU.