The Danish government has passed a bill that introduces changes to the DKr256bn (EUR34bn) ATP pension scheme - a Danish labour market supplementary fund.
Key proposals include reducing the ATP’s rate of interest and introducing age-related contributions.
According to Haugaard Ole Nielsen, appointed actuary at the Hillerod-based fund, the long term rate of return - post tax and inflation - has lowered from 4.5% to 2%. The move brings ATP in line with other pension funds and insurance companies, which Nielsen argues may reduce competition.
He added that the cut also brings the fund into line with lowering inflation rates in Euroland.
“The reasoning to lower [the rate] is to extend the possibility to regulate the money bonus every year to regulate the pension scheme”, he said.
The move is not as a result of the third EU life assurance directive since ATP is the only Danish pension fund not affected by this principle.
The new restructure also brings in age-biased contributions. At present all full-time employees of the approximately four million member scheme pay a uniform rate of about DKr2700 a year.
“The system is collective one, “explained Nielsen. “But the overhaul will mean that contributions will now take age into account.”
The bill also introduces more equal rights across ages for dependents in the event of death and is due to come into effect on 1 January 2002.
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