DENMARK - Danish occupational pension provider PFA Pension has taken its first step into the retail pensions market, and linked up with Danish local and regional savings banks to provide private pensions.
PFA said it had agreed to a "strategic cooperation" with the circle of local and regional savings banks behind Letpension - a newcomer to the retail pension provision marketplace.
Letpension would in future focus on developing and administering advice and distribution in the pensions and insurance arena, for local and regional savings banks, while PFA Pension would take over the role of product range supplier, PFA said in a statement.
"As a market leader in corporate pensions, we are focused on solving companies' and organisations' need for modern pension schemes and insurance, which gives value to customers," said Henrik Heideby, group head at PFA Pension.
"Through the partnership with Letpension, we will now gain access to a new and effective advice and distribution channel for private customers, in a cost-effective way," he said.
PFA said it had promised to develop its existing products and administrative systems, adjusting them to fit the customer and advice model that had been central to Letpension's original concept.
Letpension, whose name translates as "Easypension", was formed in 2006 with capital of DKK500m (€67m), provided by the 121 small institutions involved.
It set out an ambitious vision to become the Danes' preferred pensions and life insurance company by 2010, providing tailored pensions that were easy to understand. But results were slow to materialise and there have been several management changes in the last two years.
A year ago, Letpension announced a strategic partnership with Bankpension. This partnership has now come to an end, and Niels-Ole Ravn, who was managing Letpension from April this year, has left and resumed his full-time role at Bankpension. (See earlier IPE story: Bankpension to collaborate with letpension)
Speaking about the new cooperation with PFA Pension, Leif Larsen, director at Jyske Bank and chairman of Letpension, said: "This was not how we had imagined Letpension to be from the beginning. But an increased demand for capital and products, as well as the pressure of the financial crisis, has made it necessary to rethink Letpension's business plan.
Letpension's management believed the new alliance was a good response to the challenges, as Larsen added: "Within the savings institutions and in Letpension we can keep all our innovative thoughts about advice and customer service. And we can combine this with all of PFA Pensions known, strong products."
As part of the arrangement, it has been proposed that Heideby take a place on the Letpension management board, while Letpension takes two places on PFA's customer board.
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