DENMARK - Pension manager ATP posted overall investment returns of 8.5% for 2009, but officials remain unsure about whether or not they can increase pension payments next year.
ATP's Supervisory and Executive Boards said in their annual report they expected a gradual economic recovery after the financial crisis. However, due to the uncertainty surrounding the economic developments, ATP said it is "uncertain" it will be able to increase pensions at the end of 2010.
In October, chief executive Lars Rohde said ATP has frozen pensions at their 2009 level for this year because of uncertainty in the markets, an increase in the number of pensioners in retirement and an increase in life expectancy. (Global Pensions; October, 29, 2009)
According to its annual report, ATP's returns equate to DKK28.8bn (US$5.4bn). Equities were the best performing assets yielding 22.5%. In particular, domestic equities returned 51%.
"Despite the challenges in the financial markets in 2009, all of ATP's five risk classes posted very positive results. This is quite unusual. I'm particularly delighted with the performance of the domestic equities portfolio and the impressive return achieved on bonds," chief executive Lars Rohde said.
Credit holdings - mainly high-yield bonds loans to credit institutions and funds - delivered an 18% return and government and mortgage bonds, 5.3%.
Commodities posted a return of 19.8%. Inflation hedging assets, which include mainly index-linked bonds, infrastructure and real estate, obtained a return of 5.3%. The return was achieved despite falling inflation, ATP said.
Rohde added ATP increased pension reserves to almost DKK65bn, which represents a rise of over one-third.
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