Investment focus

PFA Index Plus

Investment focus

PFA Index Plus

In PFA Index Plus, your savings are invested in a broad portfolio of assets that follow selected fixed indices. This means that the value of your pension savings will increase if the selected indices rise. Similarly, the value of your pension savings will fall if they fall.

Please note: PFA Index Plus will be launched on 1 October 2026 

Investment focus that follows selected predefined indices

With PFA Index Plus, you thus opt out of active management of your savings. This means that your savings will not be regularly adjusted by PFA’s investment experts in line with the current world situation.

The risk in PFA Index Plus will be comparable to PFA Plus, but as the product is simpler, we expect that the return over a lifetime may be lower than in PFA Plus, although in practice the return may be higher, the same or lower.

The currency in the PFA Index Plus High fund is uncovered, which is why there may be greater short-term fluctuations as a result of currency swings. 

PFA Index Plus advantages  

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A simpler investment:
With PFA Index Plus, you know exactly how your savings are invested, as they follow selected market indices. This is ideal if you want a simple solution.

 
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Reduced costs:
The simpler investment solution means that the product is slightly cheaper compared with PFA’s other investment solutions.

How does PFA Index Plus stand out? 

PFA Index Plus differs from PFA Plus and PFA Climate Plus in three key areas:

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No alternative Investments, including properties etc.:
PFA Index Plus reflects underlying market indices and the return thereon. Your savings will therefore not include alternative investments such as properties, private equity and infrastructure.

 
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The product follows selected fixed indices: 
Your savings will not be regularly adjusted by PFA’s investment experts in relation to the global situation with a view to increasing returns or ensuring protection against major market fluctuation.

PFA Index Plus and responsible investments 

Investments in PFA Index Plus are subject to PFA’s policy for responsible investments and active ownership. This means that requirements are imposed on the companies’ work with social, environmental and governance matters. Therefore, there may be instances where some of the underlying investments (shares and bonds) from a given market index have been deselected by PFA because these investments do not comply with our policy. The return on your savings may therefore deviate from the market return.



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Which risk profile should I choose?  

You choose the risk profile that matches your risk appetite. Your options are: Profile Low, Medium or High. The profiles differ in terms of the balance between return potential (what you may earn) and risk (the possibility of fluctuations in your savings). The higher the risk you take on, the greater the risk of fluctuations in your savings, as a larger share will be invested in the PFA Index Plus High-risk fund. However, a higher risk will also mean a greater return potential on your savings.

The choice of investment profile is important for your pension savings – as well as for your future. Therefore, it is important that the relation between risk and return matches your preferences and your finances. The right choice depends, among other things, on what your overall financial situation and your total long-term savings look like. Profile Medium will often be suitable for most people; Profile Low may be a better option for you who have less risk tolerance. Meanwhile, Profile High may be the perfect match, if you prefer to invest your savings with the potential of a higher return, but thus also a higher risk of loss. 

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Profile Low

Approximately 60 % of your savings are invested in the PFA Index Plus High-risk fund while approximately 40 % in the PFA Index Plus Low-risk fund.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 14 years before starting to receive pension payouts. At retirement, the investments in the PFA Index Plus High-risk fund are gradually reduced to approximately 30 per cent. Hereafter, the proportion will be reduced by approximately 1 percentage point per year and be approximately 10 per cent 20 years after retirement. The percentage will not fall below approximately 10 per cent.

 
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Profile Medium

Approximately 95 % of your savings are invested in the Index Plus High-risk fund while approximately 5 % in the Index Plus Low-risk fund.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 18 years before starting to receive pension payouts. At retirement, the investments in the PFA Index Plus High-risk fund are gradually reduced to approximately 45 per cent. Hereafter, the proportion will be reduced by approximately 1 percentage point per year and be approximately 20 per cent 25 years after retirement. The percentage will not fall below approximately 20 per cent.

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Profile High

100 % of your savings will be invested in the PFA Index Plus High-risk fund.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 12 years before starting to receive pension payouts. At retirement, the investments in the PFA Index Plus High-risk fund are gradually reduced to approximately 60 per cent. Hereafter, the proportion will be reduced by approximately 1 percentage point per year and be approximately 30 per cent 30 years after retirement. The percentage will not fall below approximately 30 per cent.

Gradual reduction of risk 

Irrespective of the investment profile you have selected, your investment risk will gradually be reduced as you approach retirement age.

This is to reduce the risk of large drops in the savings at the end of the savings period, where the need for security rises and you have limited time to recover possible losses. The gradual reduction will continue after your retirement.

Here, you can read about how the gradual reduction occurs in the different profiles.

Integrated gradual reduction of risk in all profiles

The greater the potential for returns, the greater the potential for losses.

The closer you are to your retirement age, the harder it becomes to make up for potential losses. Therefore, the investments with the highest risk will be gradually reduced as you approach retirement – the closer you get to retirement, the lesser risk will be involved when we make investments on your behalf.

The relationship between risk and return

Investment returns vary from year to year, and both shares and bonds may yield negative returns. There is often a connection between risk and return. The greater the risk you are willing to take, the greater the potential for obtaining a high return. Typically, shares generate higher returns than bonds. However, shares also have the greatest fluctuations, and therefore the highest risk as well.

When your pension payout is in process

When your pension payout is in process, your savings will still be invested in market rate – and in the same investment profile and the gradual reduction of risk will resume.

Having your savings placed in the market rate environment means that your pension may increase or decrease. When your payouts are about to start, we will, as a rule, fix your monthly payout until the end of the year. Hereafter, your pension payouts will generally be adjusted once a year with effect from January in the new year.

The pension payments will be fixed based on the size of your savings and our principles of payout in force at any time, which among other things include assumptions on expected return (payout rate). If the actual return of the year turns out higher or lower than assumed, the payouts may increase or decrease. Payout of life pension also includes the assumptions of remaining life expectancies, which may be subject to regular changes.

However, it is not only the return and the development in life expectancy that affect fluctuations in the pension payments. This also applies to costs, taxes, etc. If we change our principles of payout, including the payout rate, this may also impact the size of the benefits.

Payout protection cover

Pension customers at PFA Invests who have selected Profile Low can link the product payout protection cover.

Payout protection cover on your savings plan ensures that, as a rule, your pension payouts will not drop below a certain level. If you have selected payout protection cover, we generally phase the cover onto your savings during the last ten years prior to your expected retirement. This is done by gradually placing a part of your savings into specific funds with very low risk, these are called duration funds.

From the point in time when we start phasing in payout protection cover on your savings plan, you can keep track of how large a part of your savings that is placed in duration funds. Additionally, you can keep track of the provisional secured level of your payments. The special duration funds that are applied for payout protection cover are, under normal market conditions, expected to generate a lower return than the High-risk fund and Low-risk fund, which are the funds on which your savings without payout security are distributed. This means that your pension payouts will usually be expected to be lower if you have a plan with payout protection cover. In some cases, even considerably lower.

Please note that payout protection cover may lapse or change in certain situations. You can read more about this in the Terms and Conditions of your Pension.

Find out whether you can select payout protection cover



 

Environmentally sustainable investments
The investments underlying this financial product (payout protection cover) do not consider the EU criteria for environmentally sustainable economic activities.

Categorisation in accordance with the EU regulation on sustainability-related disclosures
The investments underlying the payout protection cover do not aim to further environmental or social characteristics and do not have sustainability as their objective, according to article 6 of the EU regulation on sustainability-related disclosures (SFDR).

PFA Index Plus is for you who:

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want a simpler investment solution

 
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want to invest your pension in a cheaper investment option with a slightly lower expected return*

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do not want PFA to regularly adjust the investment of your savings in line with the world situation

 

*PFA Index Plus has a slightly lower expected return compared with PFA Plus.

How do I get started?

We recommend that you log on to My PFA and complete our investment guide. Here you will be asked about your preferences regarding risk, investment focus, reduction of risk, indices as well as corporate responsibility and sustainability, and will subsequently receive a recommendation on how your savings should be invested.

Try the investment guide on My PFA

We are ready to help you

Please feel free to call our advisory services centre at

(+45) 70 12 50 00

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