Denmark’s largest commercial pensions provider, PFA, reported a 0.8% market-value-adjusted return on its with-profits, or average-rate, pension product but praised the risk-reduction investment strategy it has put in place.

The return on with-profits (gennemsnitsrente) pensions had fallen from 4% in the same quarter a year ago, according to PFA’s interim figures. 

Without adjustment for market value, PFA said its first-quarter 2016 with-profits return was 4.8%.

Meanwhile, market-rate pensions made a 0.3% loss, down from an 8.9% return in the same period last year.

Allan Polack, chief executive at PFA, said: “We are delivering, in spite of the turbulence on financial markets, a solid investment result of DKK10.5bn (€1.4bn), which safeguards our customers against a big loss of value.”

At the same time, contributions have grown significantly, he said.

The investment result in absolute terms compares with DKK28.3bn generated for the first quarter of 2015 but is not far below the DKK13.6bn the provider ended up producing for the whole of 2015.

Polack said that, as part of the company’s ‘Strategy 2020’ work, and because of the turmoil in financial markets, PFA had adjusted its investment strategy at the end of 2015.

He said the effect of this adjustment was apparent in first-quarter results.

“We have reduced our risk and our proportion of equity,” he said. “At the same time, we have taken on more property and stabilising asset classes.”

This, Polack said, had a good effect at the beginning of the year.

Contributions between January and March rose to DKK7.64bn from DKK6.49bn in the first quarter of 2015.

As part of its new business strategy, Polack said PFA planned to continue developing its position as the leading commercial pension company.

“We are ahead of our goals in this area, and the growth shows it is not only our existing customers that want to continue with PFA but that we are also continuing to see an increasing number of new customers,” Polack said.

Costs fell in the quarter to DKK187 per member from DKK198 per member at the same point last year.

Total assets fell to DKK599bn at the end of March from DKK626bn at the same point last year but were higher than the DKK545bn they amounted to at the end of December.