How PFA CustomerCapital works
How CustomerCapital works
PFA Pension’s objective is to create as much value for the customers as possible. This is, among other things, ensured through our model for distribution of profit and risk, which we call CustomerCapital. The main part of PFA Pension’s customers with pension savings currently has CustomerCapital. In 2019, the return on CustomerCapital is expected to be 10 % before pension yield tax. In future, the return on CustomerCapital may change, and it may also be negative. PFA Pension fixes part of the return and is therefore also entitled to make changes to it.
CustomerCapital consists of Individual CustomerCapital and Collective CustomerCapital.
Below, you can read more about how the model works overall. The detailed rules in force at any time appear from the regulations listed at the bottom of the page and from PFA Pension’s technical basis, which have been reported to the Danish Financial Supervisory Authority.
Payments to Individual CustomerCapital
If you have CustomerCapital, an amount corresponding to 5 % of your payments and single payments to your savings plan will be transferred to Individual CustomerCapital. Individual CustomerCapital is not accumulated on transfer of pension savings from another pension plan with PFA Pension or another pension supplier.
With Individual CustomerCapital, you will receive a part of the return which, in other pension companies, would be allocated to the owners. Individual CustomerCapital forms part of the capital base in PFA Pension, which makes up PFA Pension’s financial strength. Technically, Individual CustomerCapital is a so-called bonus provision, type B.
How return is added on Individual CustomerCapital
With Individual CustomerCapital, you, as a rule, get at least the same return every year as the return PFA generates on the shareholders’ equity before tax. If you had CustomerCapital in 2018, the return was 10 % before pension yield tax.
For 2019, the expected annual return on Individual CustomerCapital is 10 % before pension yield tax. PFA Pension has decided that - at present, only for 2019 – the entire annual return will be distributed to the pension savings through a single addition of interest in April 2020 (provided that you still have your pension plan with PFA Pension at that time).
A positive return on Individual CustomerCapital will be deposited into you ordinary savings plan. Any negative return will be deducted from Individual CustomerCapital. Negative returns may occur if PFA Pension sustains a loss and Collective CustomerCapital has been exhausted and therefore cannot cover Individual CustomerCapital’s share of the loss. This is explained further in the menu "What about the risk”.
|Interest on individual CustomerCapital, per cent before pension yield tax
Collective CustomerCapital contributes to your return
Collective CustomerCapital is a special bonus provision (reserve) which PFA Pension’s owners created from the shareholders’ equity in PFA Pension.
The PFA Foundation and the organisations that own PFA established this reserve for the benefit of PFA Pension’s customers at any time who have Individual CustomerCapital. Collective CustomerCapital can contribute to increasing the return on Individual CustomerCapital. In this way, it is possible to transfer an amount every year from Collective CustomerCapital to Individual CustomerCapital until Collective CustomerCapital has been exhausted. This means that customers with Individual CustomerCapital will be given the opportunity to receive a high return on their Individual CustomerCapital. Over a number of years, Collective CustomerCapital will be distributed to both “existing” and “new” customers with Individual CustomerCapital.
Collective CustomerCapital is – as the name suggests – a collective reserve. This means that you will not get a share of Collective CustomerCapital if you transfer your pension plan to another pension supplier or if you cancel your pension plan.
As a rule, CustomerCapital as a whole gets at least the same return every year as PFA Pension’s shareholders’ equity before tax.
What about the risk?
Along with the shareholders' equity and Collective CustomerCapital, Individual CustomerCapital forms part of PFA Pension's capital base. By placing savings in Individual CustomerCapital, PFA Pension’s customers have a share in the profit PFA Pension generates. However, Individual CustomerCapital is also to cover for any losses in PFA Pension. As long as Collective CustomerCapital remains, this will cover Individual CustomerCapital's share of any losses. When Collective CustomerCapital has been exhausted, Individual CustomerCapital will, as a rule, be subject to the same risk as the shareholders’ equity. This means that Individual CustomerCapital may be reduced (negative return) and, in the last resort, be completely exhausted.
Accumulated Individual CustomerCapital cannot be converted into ordinary savings. Thus, deselecting CustomerCapital means that no further payments will be made to CustomerCapital.
Generally, Individual CustomerCapital will follow the cancellation of the pension plan, for instance, in connection with transfer to another pension supplier. However, this will not apply if PFA Pension does not meet the solvency requirement.
Average interest rate, payouts and CustomerCapital
When the payouts from your average interest rate plan begin, it is no longer possible to have CustomerCapital. Instead, your individual CustomerCapital will be transferred to your savings.
Regulations on CustomerCapital – market rate
Regulations on CustomerCapital – average interest rate