Danish pension company PFA has announced it will reduce customers' future ongoing payments to KundeKapital from 2 per cent to 1 per cent from 1 August 2026 to avoid overcapitalisation following “record-breaking” customer growth.

This change aims to future-proof the model, allowing PFA to continue offering customers a high expected return on individual KundeKapital, which has been 10 per cent annually since 2023.

Additionally, the change intends to increase PFA's competitiveness, enabling it to lower prices and invest in better service and solutions for customers.

PFA CEO, Ole Krogh, said since its launch in 2004, KundeKapital has paid out DKK 30.6bn to its customers, and one of the strengths of its customer community is that the value PFA creates directly benefits its customers, as it doesn’t have to send money elsewhere.

“We are adjusting the model with a view to ensuring that it can continue to deliver a high expected return for many years to come, while avoiding overcapitalisation, so that we can continue to use our funds to create maximum value for our customers," Krogh explained.

Krogh emphasised that the reduction in payments will not impact customers' existing individual KundeKapital, just future payments and transfers.

At the same time, the ceiling on the proportion of customers' total savings that can be included in individual KundeKapital when they retire with the PFA Plus market rate product will be changed, with the limit being lowered from 2 per cent to 1 per cent.

This change follows a period of "record-breaking" growth in new PFA customers, which has resulted in payments increasing by 70 per cent in three years.

Given this growth, if the model remained unchanged, PFA would risk being overcapitalised, which could limit the company's ability to use capital efficiently and deliver value to customers.

"We do not want to build up unnecessary capital, as this can hamper our ability to create the most value for our customers,” Krogh said.

“The change in KundeKapital frees up funds that can be used for other purposes that benefit all customers – for example, lower prices, better services and solutions. For PFA, it is important that we use our scale for the benefit of the customer community. That is also the goal of this adaptation.”

Krogh suggested that in recent years, PFA has worked purposefully to strengthen its investment landscape, and the adaptation of KundeKapital is a natural part of this development.

“In recent years, we have implemented several initiatives to improve our investment setup. Among other things, we have simplified and strengthened risk management, introduced new investment profiles with greater long-term return potential and reduced costs,” he continued.

“Together with the adaptation of KundeKapital, it will ensure that we can continue to create the most value and financial security for our 1.3 million customers, which is one of our most important tasks.”

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