Your pension savings

Your pension savings are an essential part of your pension plan as they will make up your financial safety net in retirement. Therefore, it is important that you consider how you want your savings to be invested.

Market rate savings – PFA Plus

In the market rate environment, the return follows the development on the financial markets, and the full return is added to your savings immediately. As a starting point, PFA will manage the investment of your savings, and you can choose between four investment profiles that differ in risk and return potential. The greater the risk you are willing to take, the higher the return potential. In all the investment profiles, the risk will gradually be reduced as you approach retirement.
In addition, you can choose whether your pension savings should be invested with a broad investment focus that is regularly adjusted in line with the world situation, an increased focus on climate or a simpler solution with index-tracking.

Profile Low

As a starting point, you have Profile Low. You can change your investment profile at My PFA without any extra charges. This is also where you find the Investment Guide which can provide you with an overview of which investment profile and share in PFA Plus, PFA Index Plus and PFA Climate Plus that best suits your expectations of return and risk as well as your preferences when it comes to climate focus.

Go through the Investment Guide at My PFA

If you prefer selecting which funds your savings should be invested in yourself, you can choose to invest your share of the pension payment and any voluntary payments through You Invest.

Read more about your investment options in PFA 

If you were employed before January 1, 2010, and have savings in PFA Traditional

If you have savings placed in both PFA Traditional and PFA Plus, we recommend that you consider collecting your savings in PFA Plus where the return potential is greater. This way, you will also only have to pay for the administration of one plan instead of two.     

With PFA Plus, you are not ensured a minimum payout. This means that if you transfer your savings from PFA Traditional to PFA Plus, PFA is often able to grant a transfer allowance, which has been calculated individually, to your savings plan. Together with your savings, the allowance makes up the total financial value of your pension savings at the time of the transfer.

The transfer allowance is a lump sum that will be transferred to your PFA Plus plan. The transfer allowance is calculated at the end of each month based on the current market conditions etc. in accordance with the rules laid down by the Danish Financial Supervisory Authority.

You can see the size of your transfer allowance as well as transfer your savings to PFA Plus at My PFA

Average interest rate savings - PFA Traditional

With an average interest rate plan, you are sure to receive a minimum payout when you retire. The return is evened out, which ensures a steady rate of interest in good as well as bad years. The risk is limited and so is the potential for a high return. The majority of your savings are invested in bonds, and only a small part is invested in shares.

With PFA Traditional, you will receive the interest rate (deposit interest rate) that is fixed by PFA on an ongoing basis. The deposit interest rate reflects the average historical and expected return seen over a period of years. This way, the annual fluctuations in the actual return is evened out. Therefore, PFA’s return on investment in a given year will not directly influence the return you receive on your pension plan in the year in question. The deposit interest rate is reported to the Danish Financial Supervisory Authority.

Minimum payout

With PFA Traditional, you are sure to receive a minimum payout when you retire. This is called guaranteed benefits. The guaranteed benefits are calculated based on cautious assumptions about return, life expectancy, risk of reduced occupational capacity, expenses, etc. This also means that PFA bears the investment risk and the risk of any increase in life expectancy.

Average interest rate and guaranteed benefits mean a significant reduction in risk. PFA has to invest the savings very conservatively in order to honour the guaranteed benefits and ensure a steady return. This means that the returns generated in the average interest rate environment are often lower than the returns generated in the market rate environment, which allows greater fluctuations and does not have any guaranteed benefits.

Read more about savings in PFA Traditional  

Is PFA Traditional still the best option for you?

The low level of interest rates and the more stringent regulations mean that you can expect lower returns in future. Therefore, it is a good idea to consider whether this is still the best solution for you or whether the market rate environment is a better option for you.

Read more about transferring to PFA Plus  

PFA recommends that you book a pension consultation to get an overview of which solution that suits you best.

Book a consultation

PFA CustomerCapital – a unique profit and risk sharing model

Some pension companies have a responsibility towards their owners or shareholders to pay out the company’s profits as dividends. This is not the case in PFA Pension, where the owners decided back in 1917 that most of the profits should go to the customers instead. For one thing, the payment is made through PFA CustomerCapital, which can be compared to an investment in PFA Pension allowing you to obtain an extra high interest on part of your savings. 

Just like other investments, CustomerCapital is subject to risk. Together with the equity, CustomerCapital forms part of PFA Pension’s capital base, which is to cover any losses that PFA Pension may suffer. Therefore, CustomerCapital may decrease and, in the worst case, run out.

The part of CustomerCapital that is linked to your own savings is called Individual CustomerCapital, and it will carry at least the same interest as PFA Pension's equity. In addition, there is a possibility of an extra interest through PFA Pension's common reserves, also called Collective CustomerCapital, where PFA Pension determines part of the interest. When CustomerCapital is linked to your plan, an amount currently corresponding to 1 per cent of your payments, single payments and transfers from other companies to savings in PFA Plus will go to Individual CustomerCapital. The interest on Individual CustomerCapital will be transferred to the other savings. However, if the interest is negative, the Individual CustomerCapital will be reduced.

You can deselect CustomerCapital

At present, 1 per cent of the payments that you make to your savings plan under PFA Invests and You Invest will go to Individual CustomerCapital. If you do not want CustomerCapital, you can deselect CustomerCapital for your future payments at My PFA (mitpfa.dk). If you deselect CustomerCapital, payments will no longer be made to your Individual CustomerCapital. However, you cannot change already accumulated Individual CustomerCapital into ordinary savings.