mast image

Impact Investing

IPE special report May 2018

Sections

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.”

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • RE-2441

    Closing date: 2018-05-31.

Begin Your Search Here