Danish pension company PFA returns between 2.7% and 15.9% in 2023

Danish pension company PFA returned between 2.7 per cent and 15.9 per cent in 2023, depending on the customer’s pension product and years to retirement, its annual report has shown.

For customers in PFA Plus, returns ranged from 2.7 per cent and 15.9 per cent, while for customers in PFA Klima Plus, returns ranged from 3.9 per cent and 10.9 per cent.

A typical customer with 15 years until retirement in the PFA’s recommended profile C in market interest received returns of 12.1 per cent.

PFA’s investments in equities performed particularly well over the year, according to the report.

It noted that the lower return in Klima Plus was due, among other things, to many of the industrial companies in Klima Plus had been hit hard by increased costs due to rising inflation, increased interest rates and bottlenecks.

"Over the past three years, we have created a return of 15.2 per cent to an average customer, and this despite a major downturn in the financial markets in 2022,” said PFA CEO, Ole Krogh Petersen.

“This provides financial security to our customers, and we are happy that we have created returns at the top of the commercial pension market.

“It shows that we have a good and robust investment strategy that adjusts our risk so that we mitigate the worst losses when the markets fall like in 2022 and at the same time come in handy when the markets are again more positive like they were in 2023.

“It also gives us faith and expectations that in the coming years we can continue to deliver attractive returns at the top of the market to our customers.”

PFA made record payments of DKK 52bn in 2023, up from DKK 46.2bn in 2022.

It had a result before tax and profit sharing with customers of DKK 1.62bn, compared to DKK 200m in 2022.

This improvement was attributed to better investment returns on the base capital due to the favourable financial markets, an improved underlying operation, and a large influx of new customers over recent years.

"In the first half of the year, we have been adept at adapting our investment risk in line with the fact that inflation has fallen, and the growth prospects and employment have continuously surprised positively and provided tailwinds on the financial markets," Krogh Petersen added.

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