PFA bows to political pressure on unit-link transparency
DENMARK - Danish pension fund PFA has responded to political demands for more transparency from the industry by publishing a new key reporting figure for unit-link returns.
Politicians and others in Denmark have called on the pensions industry as a whole to reveal investment returns from unit-link plans via a standard figure (nøgletal), so customers can compare the performance of different providers.
But PFA’s move has been made independently of competitors.
The new key figure - called N1M - allows customers to see directly how good companies have been at generating profits in unit-link products, PFA said, adding that they can use it to compare pension companies.
Anne Broeng, group director at PFA, said: “There is no reason to hesitate in publishing these figures.”
It was not particularly complicated, and customers needed to know PFA’s results and measure them in relation to other companies, she said.
“This is why we are publishing our figures now,” she said.
Unit-link pensions are becoming more prevalent in Denmark, though traditional with-profits plans still account for the bulk of pensions assets.
PFA said the return calculation method for N1M corresponded with the method used for the official key reporting figures and was based on figures in the officially reported accounts.
It said it already publishes the returns of individual risk profiles of its unit-link product PFA Plus.
Anne Seiersen, deputy director of industry body Forsikring & Pension (F&P), was reported as saying the association had been too busy so far to establish a new standard key reporting figure for the sector.
F&P pledged before the summer to set a new key reporting figure for pension companies by the end of the year, according to financial daily Børsen.
Asked why this was not underway, Seiersen said: “Because we have had 100 other things. We have still not had the chance to prioritise this.”
PFA’s N1M figures reveal a 6.3% return for the first half of 2012 and a loss of 1.3% for the full year 2011.