PensionDanmark returns beat benchmark
DENMARK – PensionDanmark, Denmark’s largest labour market pension fund, enjoyed a 15.3% return on investments over 2005, amounting to DKK6.4bn (€860m).
The scheme had roughly DKK52.2bn in total assets under management at the end of December 2005.
“The 15.3% return is about two and a half percentage points better than the benchmark investments are matched against,” a scheme spokesperson told IPE.
“That is very satisfactory for us,” he added.
The scheme’s combined investment return over the three-year period between 2003 and 2005 was pegged at 43%.
According to the spokesperson, pension premiums at PensionDanmark rose by 12% to DKK7.3bn in 2005. The increase was attributed to, amongst others, a roughly 3% increase in wages.
“Since pension contributions are a fixed percentage point of wages, if wages go up then pensions contributions will also rise,” said the spokesperson.
The fund also experienced a drop in administration costs for the third consecutive year – the 2005 costs amounted to €22m (DKK164.2m).
“The main reason for this decrease is that we have a very high focus on outsourcing here at PensionDanmark,” said the spokesperson, adding there are only 55 employees at the scheme.
“That’s quite small considering we are running a pension fund for 485,000 people.”
The merger of B&A Pension, HTS Pension and PKS Pension with PensionDenmark in August also contributed to the decrease in administration costs – administrative costs were pegged at DKK320 or €43 per member.
“We’ve increased our economies of scale,” said the spokesperson.
“I think that the growth in premiums, the fact we got over DKK50bn in assets, a very substantial investment return and lowering administrative costs are the four key areas we can point to for 2005.”