Investment focus

PFA Plus

Investment focus

PFA Plus

With PFA Plus, your savings are invested based on PFA’s entire investment universe. This means that your savings are invested in equities, bonds, property, private equity, infrastructure and forestry. PFA’s investment experts regularly adjust your investments in line with global developments. At the same time, PFA’s investment experts use various tools to reduce risk and limit fluctuations in your savings as much as possible. 

PFA Plus advantages  

ikon

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

 
ikon

Active management where we believe we can create value. This includes investing in Danish equities and bonds, as market knowledge and proximity make a difference. 

ikon

Risk management enables PFA’s investment experts to regularly adjust investments to current global developments, for example by providing protection when there are major fluctuations in the global economy.

 

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.



ikon for hjerte og hjerne 

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) but are otherwise the same across the different investment focuses (Plus, Climate Plus and Index Plus). 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 balance between risk and return potential suits you and your financial situation. 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, but 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.

icon 

Profile Low

Approximately 60 % of your savings are invested in the high-risk funds and approximately 40 % in the low-risk funds.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 14 years before the pension payout date. At retirement, the investments in the high-risk funds are gradually reduced to approximately 30 per cent. Thereafter, the proportion will be reduced by approximately 1 percentage point per year, reaching approximately 10 per cent 20 years after pension payouts begin. The percentage will not fall below approximately 10 per cent.

 
icon 

Profile Medium

Approximately 95 % of the savings are invested in the high-risk funds and approximately 5 % in the low-risk funds.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 18 years before the pension payout date. At retirement, the investments in the high-risk funds are gradually reduced to approximately 45 per cent. Thereafter, it will be reduced by approximately 1 percentage point per year, reaching approximately 20 per cent 25 years after retirement. The percentage will not fall below approximately 20 per cent.

icon 

Profile High

100 % of the savings will be invested in the high-risk funds

The distribution indicates the risk in the profile before gradual reduction of risk, which begins 12 years before retirement. At retirement, the investments in the high-risk funds are gradually reduced to approximately 60 per cent. Thereafter, it will be reduced by approximately 1 percentage point per year, reaching 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 closer.

This is to reduce the risk of significant declines in your savings towards the end of the savings period, when the need for security increases and you have limited time to recover any losses. The gradual reduction will continue after your retirement.

Here, you can read about how the gradual reduction takes place 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

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:

 

ikon for graf 

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.

 
ikon for ekspert 

experts to regularly monitor and adjust the investment of your savings in line with global developments.

Find the investment focus that matches your preferences

See the differences and similarities between PFA Plus, PFA Index Plus and PFA Climate Plus to help you choose the investment focus that suits you best.

Compare investment focuses

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, risk reduction, corporate responsibility and sustainability, after which you will receive a recommendation on how your savings should be invested.

Try the investment guide on My PFA

We are ready to help you

You are welcome 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

 

Returns at PFA

See the returns for the different investment options in our calculator.       

View return calculator