MP Pension investment returns increase to 1.8 per cent

A "quiet recovery" in the financial markets has seen investment returns for Danish pension fund, MP Pension, increase to 1.8 per cent, compared to -13 per cent in March.

In its latest update, the scheme emphasised that whilst the pandemic has been a shock to the global markets, and is still to be fully "driven back", there is now much more control over the situation.

MP Pension investment manager, Anders Schelde, clarified however, that it is difficult to predict what the final rate will be considering returns are not settled until the turn of the year, estimating a “cautiously optimistic” rate of around zero or “maybe even slightly positive”.

Although he also emphasised that, prior to the crisis, the scheme had room to lose the entire value of its shares and still be able to meet the statutory capital requirements, which it can “continue to do so” even now.

“In other words,” Schelde explained, “we can go through even the most extreme scenarios and continue to take sensible care of our members' savings - and not least continue to pay pensions to our 15,000 pensioners.”

The scheme highlighted the 2008 financial crisis as previous example of weathering the storm well, with MP Pension reporting an average annual return between 2009 and 2019 of 9 per cent.

Schelde added: “The lesson from the financial crisis is that the markets are going up and down - and that even violent downturns are short-lived when you invest long term. We must therefore all take it easy and continue to save up for retirement."

He clarified that it is important to view retirement in the long run, arguing that in light of this, “one bad year does not matter so much”, with the scheme having reported returns of 15 per cent in 2019.

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