Report reveals potential impact on long-term pension portfolio durability

The Economic Councils has published the Autumn Sage report, which revealed that long-term portfolio durability had dipped.

The Economic Councils' economic forecast, however, showed growth in Denmark this year climbed to 3.9 per cent, despite the pandemic.

“The coronavirus crisis was tough and short for Denmark, and all forecasts point to a strong recovery that will continue in 2022. Against this background, we share the Sages' assessment that fiscal policy should be tightened now. This can reduce the risk of overheating both in the labour market, but also in the housing market, which, seems to have reached its peak,” said Forsikring & Pension CEO, Kent Damsgaard.

“Fiscal sustainability is an important management tool for the Danish economy. Sustainability says something about the need for structural reforms. That is why it is important when sage come up with new forecasts for durability.

"Although there is of course great uncertainty about the durability calculation, it is still significant when a third of the durability disappears in today's updated estimates,” he added.

The report also focused on the working ability of elderly Danish citizens. It suggested that amongst 50-70 year olds, there is an ‘unused’ health potential of 3.5 years.

Recently, studies have revealed that Danish citizens are increasingly working into later life.

Research from AkademikerPension found that the average retirement age for the country had increased by two years over the past 12 years.

“The really good news in the sages' report is that our life expectancy and health go hand in hand. This shows that the rising old-age pension age makes sense both through a socio-economic lens and when we look at the health of the individual.

Therefore, it is also really positive that both sides of the Folketing are busy dealing with, for example, set-off, which affects the elderly in jobs,” said Damsgaard.

“We talk a lot about finding ways to increase the labour supply at this time, but there should be far more focus on the Danes' general state of health.

"The healthier we are, the longer we can work - and the better life we have. Therefore, work with health and prevention is also a huge focus area in the Danish insurance and pension industry,” he added.

    Share Story:

Recent Stories

Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.