Expenses and prices

PFA ranks among the most cost efficient on the market when it comes to administration of pension plans. Also, PFA charges some of the lowest expenses and prices. PFA strives for complete openness and transparency with regard to the expenses the customers pay.

Your expenses at My PFA

Various types of expenses are related to pension plans. With a PFA Plus pension plan, you can always log onto My PFA to see how much your plan costs. Here, you find a list of the prices of insurance cover and of the expenses in connection with general services, advisory services etc. and a savings summary that lets you keep track of your regular direct expenses. You can also view your annual expenses in per cent and in DKK.

 

Expenses for PFA Plus 2017

PFA Plus plans are subject to both direct and indirect expenses.

Expenses for PFA Plus

Direct expenses
Direct expenses are administrative expenses, which, among other things, cover general service and advisory services. These expenses are deducted from your payments regularly.

Expenses related to plans without payments
The annual expenses amount to DKK 720.

Expenses related to plans in the payout phase
The annual expenses amount to DKK 720.

Payout of endowment pension costs DKK 0 if it is paid out as a lump sum.

Payout of endowment pension costs DKK 0 if it is split into several payouts.

One-time expenses
Some pension plan changes are not covered by the direct expenses, and you therefore need to pay for them separately.

Expenses in connection with a transfer to another supplier, DKK 1,660. In certain cases, a surrender charge may also apply.

Expenses in connection with payout of savings before the agreed date (surrender), DKK 1,660. A flat-rate tax of 60 % must also be paid to the Danish State.

Expenses related to investment of the savings in connection with a gradual internal transfer, DKK 400.

Special advisory services, DKK 1,000.

Single payments transferred from another pension supplier are not subject to any expenses provided that the transfer is made within the Danish Job Change Agreement or the transfer is agreed as part of a pension agreement.

Indirect expenses
Indirect expenses are the investment expenses payable in the funds in which your savings are invested – both in PFA Invests and You Invest. These expenses are deducted from the return and they will therefore not appear from the pension summary at My PFA. In addition to the administrative expenses charged by the fund managers, current trade expenses apply.

The investment expenses related to the investment profiles in PFA Invests depend on which investment profile you have selected and the number of years until you retire. In the table below, you can see the expected expenses for investment profiles A – D with respectively 30, 15, 5 and 0 years until retirement.

Years until retirement Investment profile Expected annual expenses in %
30 years Profile A 0.64 %
30 years Profile B 0.74 %
30 years Profile C 0.85 %
30 years Profile D 0.95 %
15 years Profile A 0.61 %
15 years Profile B 0.67 %
15 years Profile C 0.74 %
15 years Profile D 0.80 %
5 years Profile A 0.58 %
5 years Profile B 0.63 %
5 years Profile C 0.67 %
5 years Profile D 0.72 %
0 years Profile A 0.57 %
0 years Profile B 0.61 %
0 years Profile C 0.66 %
0 years Profile D 0.70 %
Updated as at 1 January 2017    

Read more about the indirect expenses for the investment profiles in PFA Invests

In You Invest, the investment expenses also depend on your investment selections. When you invest your payments, select new funds or change the way your savings are invested among the funds, you pay a spread fee.

See the indirect expenses and spread of the funds in You Invest


Expenses in general
The rates may be changed effective as from the beginning of the coming month.
Special rules apply to plans serviced by brokers.

Expenses for average interest rate 2017

Traditional pension plans with average interest rate are subject to both direct and indirect expenses. 

Expenses for average interest rate

At My PFA, you can see the cost of your pension plan, the direct and indirect expenses as well as the total annual expenses in per cent and DKK.

Direct expenses
Direct expenses are administrative expenses, which, among other things, cover general service and advisory services. These expenses are deducted from your payments regularly.

The direct expenses when making payments to a standard company pension plan after deduction of labour market contribution (pension plan with insurance cover and/or payment protection cover (premium waiver)).

Rates as at 1 Jan 2017
of annual payments up to DKK 57,000 1.5 - 4 %
of annual payments between DKK 57,000 and DKK 283,000 1.5 - 4 %
of annual payments between DKK 283,000 and DKK 1,810,000 1.5 - 2 %
of annual payments exceeding DKK 1,810,000 0 %

The direct expenses when making payments to an individually established pension plan after deduction of labour market contribution (pension plan with insurance cover and/or payment protection cover (premium waiver)).

Rates as at 1 Jan 2017
of annual payments up to DKK 57,000 6 %
of annual payments between DKK 57,000 and DKK 283,000 6 %
of annual payments between DKK 283,000 and DKK 1,810,000 2 %
of annual payments exceeding DKK 1,810,000 0 %
of single payments up to DKK 283,000. 4 %
of single payments between DKK 283,000 and DKK 1,810,000 2 % 
of single payments exceeding DKK 1,810,000 0 %

The minimum monthly expenses amount to DKK 60

Minor payments (less than DKK 10,200 annually) and minor single payments (less than DKK 9,000 on existing plans and less than DKK 36,000 on new plans) may be subject to an extra charge in addition to the above-stated rates.

The single payment limits of DKK 283,000 and DKK 1,810,000 are reduced by the annual payments.

Single payments transferred from another pension supplier are not subject to any expenses provided that the transfer is made within the Danish Job Change Agreement or the transfer is agreed as part of a pension agreement.

Expenses related to plans without payments (paid-up policies)
Monthly expenses, DKK 60

Expenses on payout
The expenses related to regular pension payouts amount to 2 % of the payout, however, minimum DKK 30 and maximum DKK 60 per month.
Payout of endowment pension costs DKK 0 if it is paid out as a lump sum.
Payout of endowment pension costs DKK 0 if it is split into several payouts.

One-time expenses
Some pension plan changes are not covered by the direct expenses, and you therefore need to pay for them separately.
Expenses in connection with a transfer to another supplier, DKK 1,660. In certain cases, a surrender charge may also apply.
Expenses in connection with payout of savings before the agreed date (surrender), DKK 1,660. A flat-rate tax of 60 % must also be paid to the Danish State.
Expenses related to especially cost-consuming calculations, DKK 1,660.

Indirect expenses
Among other things, the indirect expenses cover the investment expenses, which you pay through the investment return.

Expenses in general
The rates may be changed effective as from the following month.
Special rules apply to plans serviced by brokers.

Complete openness and transparency

At PFA, we have complete openness and transparency with regard to the expenses the customers pay in order to have their pension savings with us. Here you can read more about the initiatives we have taken in order to achieve complete openness and transparency.

Complete openness and transparency

Expenses should be comparable

Since 2008, the individual PFA customer has been able to view all of his or her annual expenses in both DKK and per cent in the annual survey. As from 2011, the method has been described in detail and published in PFA’s description of methods. Please note that the description of methods is available in Danish only. The external auditors have given their opinion that the description of methods has been complied with.

The expenses are calculated in the same way in all companies and all expenses are included in the calculations - regardless of what the expense is called and where the expense belongs. A modern pension plan includes savings, insurance cover and advisory services, and, with complete openness regarding expenses, the customer is able to choose the most competitive offer on the market.

The expenses are calculated per customer per plan in the form of two simple key figures:
Annual expenses in DKK
Annual expenses in per cent.

This means that the customer may view his or her expenses as an easy-to-understand amount in DKK, and, for comparison, the customer may view the expense level in proportion to the size of the savings.

The annual expenses in DKK show the price of the pension savings

The annual expenses in DKK show the expenses in connection with having a savings plan with a pension company and may thus be described as the price of a savings plan. The annual expenses in DKK include all traditional expenses, such as rent, administration and IT as well as payment to the capital base and all expenses related to investments. Regardless of whether the expenses are paid by PFA or someone else.

However, it is important to be aware that the price is not the only thing that matters when choosing a pension plan. It is also important to look at the total value creation in the form of return, general service and advisory services.

The expenses are known – at the end of the year

Customers may view their annual expenses in DKK and per cent by logging onto My PFA or by receiving an annual survey by post. The actual expenses in connection with average interest rate plans in 2016 are calculated after the completion of PFA's annual report and are then informed to the customers in the spring 2017. Customers with market rate plans in PFA Plus may view their expenses daily and their annual expenses in per cent just after the turn of the year.

Expense meter provides competition

In order to help corporate customers make a qualified decision when choosing a new pension supplier, PFA has an expense meter on its website just like the other Danish pension companies.

Try the expense meter (in Danish only)

Overall, the expense meter applies the same method as the one used in the annual survey, and it gives an estimate of the expense level in 2017 and onwards. This means that it is well-suited for comparing price levels across companies. Subsequently, a private or corporate customer may request a specific quotation with the exact prices. Transparent expenses also make it possible to compare savings across investment environments. It provides customers with a new tool to make decisions when they know the annual expenses in per cent in connection with a pension plan and in connection with the investment of cash and cash equivalents.

New insight into investment expenses

Traditionally, expenses in connection with investments have lacked transparency. The investors’ focus has been on the net return and thus on the amount of money the investors actually receive. It has been pioneering work in the field of investments to split the net return into a gross return and the related expenses. This is information which many external funds do not provide at all.

It is important to make it clear that all investment expenses have always been deducted from the return. This means that when the investment expenses are made visible, the return before deduction of investment expenses will be proportionally higher. Thus, the individual customer will receive the same return as before.

This means that the pension industry has made the actual expenses in connection with investments visible. Paradoxically, this means that the gross return has increased. Ultimately, increased transparency and insight into this area is in the investors’ interest and therefore also an advantage for the pension customers. Make pension easier to understand! The expenses which the customers are paying have been made very simple with the key figures, annual expenses in DKK and per cent. Of course, the underlying calculation is complex and will most likely not make for enjoyable reading for most customers, however, it is fully accessible to anyone interested in PFA’s description of methods. Please note that the description of methods is available in Danish only.

The purpose of simple key figures is of course to make them specific and usable. When most people see the pension industry as being complicated, it is often not because of a lack of information but because of too much information. PFA focuses on making pension more simple and easy to understand, and we believe that the key to achieve this is to simplify and layer information in order to make it relevant for the individual customer. In this way, the fully detailed information is of course accessible at our website and at My PFA for the detail-oriented customer.

Market rate – PFA Plus – and expenses

PFA Plus is PFA’s modern pension product and is a so-called life cycle product in which each individual customer’s deposit is invested according to the customer’s age and selected risk profile. There are no unallocated reserves. All customers receive the full return for the year and the deposit comprises the full value of the savings plan, neither more nor less.

The total expenses in the market rate environment in 2016 were lower than in the average interest rate environment, which PFA also expects to be the case in the future. In part, this is because there is no operational risk charge in the market rate environment. Also in the long term, PFA expects PFA Plus to have lower administrative expenses than the average interest rate environment. The investment expenses are a bit higher as PFA Plus allows for investing more freely and with greater risk spread in order to achieve a higher return.


The table below shows the annual expenses in per cent in PFA for both market rate savings and average interest rate savings.

Annual expenses in per cent Average interest rate Market rate Total
Administrative expenses and acquisition costs 0.24 0.34 0.28
Investment expenses 0.53 0.65 0.58
Operational risk charge and guarantee payments 0.47 0.00 0.26
Standard annual expenses in per cent 1.24 0.99 1.13