DENMARK - Sampension, Denmark's fourth largest pension fund, reported a 16.2% investment return for 2010 for its with-profits pension product - the highest level achieved for 10 years - buoyed by strong profits on government bonds and equities.

Sampension's managing director Hasse Jørgensen said: "The financial markets were characterised by significant uncertainty in 2010. Nevertheless, on the whole, all our investment portfolios contributed well to the result, which is very satisfactory."

Falling interest rates had been a plus for the 2010 result, with a good return on government bonds, the labour-market pension fund said.

"On the equities side, Danish shares and emerging market shares had a return of more than 25%," it added.

The return before PAL (tax on pension returns) for the traditional with-profits product was 16.2% after just 1% reported for 2009.

This was the highest level reported for 10 years, the fund said. The newer market-rate product returned 10.8% before PAL, up only slightly from 10.5% the year before.

Contributions to the market-rate pension product rose steeply in 2010 to DKK2.1bn (€287m) from DKK1.5bn, while the with-profits product saw a slip in contributions to DKK5.2bn from DKK5.6bn.

Overall, Sampension said savings in its market-rate product rose by DKK16bn to total DKK35bn in 2010.

This meant that more than 65% of the pension fund's currently contributing members now had this type of product, rather than the with-profits pension.

On the subject of its controversial decision last year to withdraw the yield guarantees on its pensions, Sampension said in its annual report that the move had increased its solvency coverage to 365% on 1 January from 196% before the change.

Looking ahead to 2011 results, it said it expected continued moderate growth in contributions.

It added: "That should be seen in the light of the generally low wage development in society."

Total assets rose to DKK116.3bn in 2010 from DKK97.4bn a year earlier.