Denmark’s FSA has initiated a study of all Danish pension companies’ market interest products to map the characteristics of the decumulation phase.

The survey is launched as a result of the products’ risks, which have previously been carried by the companies, but is now transferred to the individual members who now have to carry possible losses.

Furthermore, the FSA will get an overview of the companies’ supply of products, including insight into general trends in relation to product characteristics and risk management in both the savings and decumulation phases, while determining whether some companies differ significantly.

In a statement, FSA vice director Carsten Brogaard said: “The decumulation phase in market rate solutions could be very different than in traditional guaranteed pensions solutions.

“The payments cannot be expected to be stable, and for some products, payments can vary significantly in size over the decumulation period. We want a better overall view of this.”

In connection with the investigation, the FSA will focus on the decisions that the boards of the companies have taken and investigate whether the boards’ wishes for the stability of pension benefits are involved in the risk management.

This, the FSA said, includes to what extent they use stabilisation or levelling mechanisms.

The results of the survey is expected to be published later in 2019.

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