DENMARK - Industriens Pension is boosting the account dividend it pays scheme members to 6% next year, as a result of the high returns it made on shares and corporate bonds this year.
"After a year when our investments have produced a return of more than 20% up to now, the company has set the account dividend for 2010 at 6%," the Danish labour market pension fund said in a statement.
This time last year, Industriens announced it was dropping its account yield to 2.5% for 2009 from the 6.5% it paid in 2008. At the time, it said the decision was meant to respect the financial stability agreement that the pensions sector had made with the Ministry for Economics and Business Affairs. This agreement obliged pension funds to be restrained in setting account yields for the year.
"In a time of great uncertainty, it is very satisfying that we can both give our members a high yield and guarantee them a good pension," said Laila Mortensen, Industriens Pension's Managing Director .
"We have come through the financial crisis with our reserves secure. Therefore, at the beginning of 2009 we could afford to increase our investment risk without gambling with our members' pensions," she said.
"Because we could see at the start of the year that the financial markets were starting to develop positively again, we raised our investment in equities and corporate bonds by a huge amount. Shares and corporate bonds have over the course of the year accounted for up to half of our total investments. It has been first and foremost these assets which have given us the extraordinarily high return," she added.
Industriens said it has achieved an average return of more than 8% a year since 1993. Industriens Pension has 410,000 members in the industrial sector and manages assets of around DKK53bn (€7.12bn).
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