Danish pension fund faces ‘extremely unsatisfactory’
2008 returns
12 May 2009
Written by Sophie Baker
Bankpension, a pension fund for employees in the Danish
financial sector, has reported “extremely unsatisfactory”
2008 results, with yields after tax standing at -19.7 per cent.
In its annual report of results, Bankpension says that its gross yield
including interest cover before tax for 2008 was -23.1 per cent, and reveals
that the return on investment before currency and interest cover, before
tax, was -37.2 per cent for alternatives. Core shares returned 38.9 per
cent, and core bonds 6.9 per cent.
The negative yield has, however, resulting in a drop in overall reserves,
falling from 26 per cent to 11.4 per cent in 2008. Administration costs
per member of the pension fund rise from DKK 1,038 to DKK 1,827, which
were attributed to the fund having charged all costs for the transition
to the new pension administration system in 2008 to income.
Bankpension said these costs included both the commissioning charge, and
for conversion, and had they not charged them to income the costs ratio
would have been 2.52 per cent, with costs per member at DKK 1,175.
However, 2009 is does not have a positive outlook with Bankpension expecting
an investment yield close to zero. In its report, it said expectations
are ‘extremely uncertain, since we now assess that there is not
inconsiderable risk of a deep recession and considerable price decreases’.
Bankpension will not, however, be changing their overall investment strategy.
Bankpension added that in 2009, the Board of Directors will continue its
focus on the fund’s long-term reserve situation, which will be viewed
in the light of the changed risk scenario. This, it said, had been affected
by the large financial losses in 2008.
