Investment focus

PFA Plus

Investment focus

PFA Plus

With PFA Invests, your savings are invested based on PFA’s entire investment universe. This means that your savings are invested in shares, bonds, properties, private equity, infrastructure and forests. PFA’s investment experts regularly adjust your investments in line with the world situation. At the same time, PFA’s investment experts use various tools to reduce risk and protect your savings against large fluctuations in the market.

PFA Plus advantages  

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A broad investment universe:
With PFA Plus, your savings are invested in many types of assets – from shares and bonds to properties, private equity and infrastructure. This provides both risk diversification and the potential for a higher return.

 
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Active management where we believe we can create value. This includes Danish shares and bonds because market knowledge and proximity make a difference. 

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Risk management enables PFA’s investment experts to regularly adjust the investments to the current global situation, for example by ensuring protection when there are large shocks in the economy.

 

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Extra focus on corporate responsibility: This means that PFA has the opportunity to invest in, for example, start-ups, security and the green transition.

 

 

PFA Plus and responsible investments

Investments in PFA 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.



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Which risk profile should I choose?   

You choose the investment 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 risk 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 High-risk Funds. 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 

Regardless of the investment profile you have selected, your investment risk will gradually be reduced as you get older and the payout of your pension draws nearer.

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 Plus is for you if you want:

 

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your savings to be invested in a broad investment universe with the opportunity to invest in many different asset classes, including alternative investments in the form of properties, unlisted shares, security and the green transition.

 
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experts to regularly monitor and adjust the investment of your savings in line with the world situation. 

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

Read more...

 

Asset allocation

Here, you can see how PFA invests your pension savings in relation to your investment profile and the number of years before you retire.       

See asset allocation

 

Return in PFA

See returns for the different investment options in our calculator.       

See return in PFA