PensionDanmark’s Annual Report: Satisfactory performance in a challenging market
For PensionDanmark, 2018 was a year of continued growth in membership and contributions, of reaching new milestones in digitalising customer service and business processes, of a high customer satisfaction score, low costs – and difficult financial markets accentuating the value of PensionDanmark’s staking on alternative investments.
Our membership grew to 732,000, and pension contributions reached an all-time high of DKK 14.2 billion.
Thanks to efficient insurance administration, continued digitalisation and the increased use of robots for administrative work, annual administrative expenses were kept at a low level of DKK 297 per member.
“Low administrative expenses will be even more important for individual member savings going forward as we expect relatively low returns in the period ahead. The high degree of digitalisation and the increased use of robots enable us to keep costs down and give our members easy access to our self-service solutions. It also frees up time for our staff to interact more individually with our members. As a result, we still have one of the highest customer satisfaction scores in the pension industry,” says Torben Möger Pedersen, PensionDanmark’s CEO.
Although returns for 2018 were impacted by financial market volatility, PensionDanmark’s broad portfolio of alternative investments helped deliver one of the strongest performances in the pension industry. PensionDanmark generated a negative 2.6% return for younger members, a positive 0.2% return for older members and a positive 0.7% return for retired members.
“Seen in isolation, negative returns are not satisfactory, but we are pleased that we were able to deliver positive returns to our older and our retired members, and that the losses incurred by our younger members were moderate. Overall returns were supported by strong returns on our real estate and infrastructure investments.
Although the financial markets were off to a good start in 2019 and we have now, as at the end of February, more than retrieved our losses, we probably have a number of years of low interest rates and volatile equity markets ahead of us. This means that Danish pension savers should expect to receive more moderate returns than the historically high returns achieved in the years leading up to 2018. It also means that we will continue to invest in real estate and infrastructure,” says Torben Möger Pedersen.
PensionDanmark has a solid platform with stable returns from substantial investments in climate-friendly energy infrastructure and certified sustainable real estate.
“We plan our investments so that we not only generate the highest possible returns for our members, but also contribute to developing innovative solutions to the key challenges facing Denmark and the international community. Being a responsible investor, this is the natural thing for us to do,” says Torben Möger Pedersen and adds that more information can be found in PensionDanmark’s Corporate Social Responsibility Report for 2018.
here you can listen to PensionDanmarks CEO Torben Möger Pedersen telling about the results in 2018.