Seven large Danish pension funds have agreed to abide by a set of common tax principles aimed at stamping out aggressive tax planning by external managers, adding to the original four funds signing the code in August last year.

PensionDenmark and ATP – two of the first signatories of the Danish Tax Code of Conduct alongside Industriens Pension and PFA Pension – announced today they are being joined by AP Pension, Lægernes Pension, MP Pension, PenSam, Pædagogernes Pension, P+ and Velliv.

This brings the total number of signatory firms to 11, which together have DKK2.5trn (€335bn) in assets under external management, according to ATP and PensionDanmark.

The chief executive officers of the four pension funds who originated the code of conduct said in a joint statement: “By joining forces, we naturally increase our influence.

“We expect our collaboration on responsible tax practices to strengthen our dialogue with external managers and thereby contribute to avoiding aggressive tax planning and at the same time promote fiscal transparency in investments,” they added.

The need for a set of common principles on tax, for external managers within unlisted investments, became clear to many in the Danish pension industry after pension funds ATP, PFA and PKA moved to distance themselves from scandal-hit Australian bank Macquarie in autumn 2018.

The CEOs of the seven pension funds now joining the tax protocol made their own joint statement, saying: “By highlighting a fair distribution of values and supporting the intentions underlying the UN Sustainable Development Goals, we can thereby control tax avoidance and aggressive tax planning.”

They added that they hoped banding together would give the firms more influence with which to combat improper tax practices, and ensure a coordinated approach in conveying the funds’ expectations to external managers.

Last month, while in talks with the four creators of the Danish Tax Code of Conduct, Velliv said it was introducing new tax practices for its investments, which would mean running more checks on its unlisted investments and participating in schemes such as the United Nations’ (UN) Principles for Responsible Investment (PRI), which works to promote fair taxation.