PFA Plus

When you have a PFA Plus pension plan, you can be part of deciding how to invest your savings. You have the freedom to choose what kind of potential return you want and thus how much risk you are willing to tolerate.

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PFA Plus

PFA Plus is a market rate savings product and includes savings products where you do not have to know too much about shares, bonds, the real estate market, interest rates or alternative investments. Our specialists manage your money in the best possible way, based on the risk you are willing to take in relation to your return expectations. You can choose between four different investment profiles - we call these investment profile A, B, C and D in PFA Plus. Most of our customers choose to let PFA invest their savings.
PFA Plus investment profile A, investment profile B, investment profile C and investment profile D

PFA Plus investment profile A, investment profile B, investment profile C and investment profile D are savings products that, among other characteristics, promote environmental and social characteristics. 

This is in part achieved by continually monitoring whether the companies in the products comply with international norms or conventions for areas such as environmental protection, labour rights and human rights and exercising active ownership via voting and corporate dialogues and by excluding specific companies and countries.

The savings products also contribute to the EU’s environmental targets by, among other things, investing in companies that supply solutions for the stabilisation and reduction of greenhouse gases and/or reduce or prevent negative impacts from current or expected climate changes. In addition, investments are also made in green bonds and properties that are built/renovated based on sustainable standards and direct investments are also made in renewable energy infrastructure.

Environmentally sustainable investments
The proportion of PFA Plus investment profile A, investment profile B, investment profile C and investment profile D that is considered environmentally sustainable is assessed based on whether the investments’ economic activities contribute to meeting one or more of the EU’s environmental targets, whether they do not significantly hinder the EU’s environmental targets and whether the companies operate in accordance with the OECD’s guidelines for multinational companies and the UN’s guiding principles for the private sector and human rights. 

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The calculation of the product’s proportion of environmentally sustainable investments pursuant to the EU taxonomy regulation is presented in the table below. There is only very limited data available on the parameter of environmental sustainability, as companies have only been obliged to report on this (pursuant to the EU’s taxonomy regulation) from 1 January 2023. The proportion of environmental sustainability is therefore based on estimates. The estimates are based on assessments and data from external data suppliers and consultants and will gradually be phased out once reports from the companies are available. The below statement of the proportion of environmentally sustainable investments, cf. the EU’s taxonomy regulation, is therefore not considering the EU’s technical screening criteria as companies are not at present reporting how they are complying with this. PFA Plus investment profiles’ proportion of investments aligned with the EU’s environmental taxonomy

  Estimated for the EU’s environmental targets 1-6
PFA Plus investment profile A 2.3 %
PFA Plus investment profile B 2.9 %
PFA Plus investment profile C 3.5 %
PFA Plus investment profile D 4.2 %
Note: The figures were calculated on 31/12/21.
Note: The proportion of environmentally sustainable investments is decreasing based on time left until retirement due to the gradual reduction of risk. The calculated proportions are before the gradual reduction is initiated.
Note: The taxonomy regulation defines six climate and environmental targets that economic activities can significantly contribute to in order to be classified as climate and environmentally sustainable. 1. Climate change mitigation 2. Climate change adaptation 3. Sustainable use and protection of water and marine resources 4. Transition to a circular economy 5. Pollution prevention and control 6. Protection and restoration of biodiversity and ecosystems. 
Source: MSCI and analyses made by PFA and/or external consultants.
 
The “do no significant harm” principle applies only to those investments underlying the financial product that take into account the EU criteria for environmentally sustainable economic activities. The investments underlying the remaining portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

For example, this means that investment profile D, which has a 4,2 % proportion of sustainable investments (pursuant to the EU’s taxonomy regulation) may well have a larger proportion of sustainable investments, but the remaining investments do not meet all of the EU’s criteria for being included in the statement of environmentally sustainable investments under the EU’s taxonomy regulation.

 


Categorisation according to the EU’s Sustainable Finance Disclosure Regulation (SFDR)
PFA Plus investment profile A, investment profile B, investment profile C and investment profile D are categorised pursuant to Article 8 as partially sustainable products in terms of the EU regulation on sustainability‐related disclosures in the financial services sector (SFDR).

When your pension is being paid out

Your savings will still be in the market rate environment and in the same investment profile once your pension is being paid out. Once you have retired, there is generally no further reduction of the investments with the highest risk in the High-risk fund with the current investment profiles.

Your savings being in the market rate environment means that your pension can either increase or decrease. When your payouts begin, we will generally determine your monthly payout for the rest of the calendar year. Subsequently, your pension payouts are generally adjusted annually, effective from January in the new year.

The pension payouts are determined based on the size of your savings and our payout principles in effect at any given time, which also contain assumptions about expected returns (payout interest). If the actual return for the year is higher or lower than assumed, the payouts may be increased or decreased. When receiving payouts from a life pension, there are also assumptions made about life expectancies which may change over time.

However, it is not just the return and life expectancy changes that have an impact on the size of the pension payouts. Factors such as costs, taxes, etc. also play a part. If we change our payout principles, including the payout interest, it may also have an impact on the size of the payouts.

Payout protection cover

Individual customers with PFA’s market rate product, PFA Plus, who have chosen the investment concept PFA Invests and have selected investment profile A or investment profile B (includes both the savings option PFA Plus and PFA Climate Plus) can also select the product called Payout protection cover for their plan. 

A payout protection cover ensures that your pension payouts will generally not drop below a certain level. If you have decided to add payout protection cover, then, as a rule, we will add this cover to your savings for ten years up to your expected retirement. This takes place via part of your savings being gradually invested in some special funds - so-called long-duration funds - with a very low risk.

From the moment where we begin to phase in payout protection cover on your savings, you can keep an eye on what proportion of your savings is invested in long-duration funds and you can also keep an eye on the secured level of cover for your payouts on an ongoing basis. The savings in long-duration funds represent the amount needed to ensure the value of the part of your pension that is linked to  payout protection cover.

The special duration funds that are used for payout protection cover are, under normal market conditions, expected to generate a lower return than the High-risk fund and the Low-risk fund, which are the funds that your savings are allocated to without payout protection cover. This means that your pension payouts will usually be expected to be lower if you have linked payout protection cover to your plan. In some cases, the payouts will be significantly lower. Under current market conditions with the historically low interest rates, we even expect that there will be losses (negative return) on the part of your savings allocated to the long-duration funds.

Please note that the payout protection cover can in some cases lapse or be changed. You can read more about this in your terms and conditions of pension.

 
Find out whether you can select payout protection cover

 

Environmentally sustainable investments
The investments that this financial product is based on do not consider the EU criteria for environmentally sustainable economic activities. 

Categorisation under the EU’s Sustainable Finance Disclosure Regulation (SFDR) 
Payout protection cover does not promote environmental or social characteristics and does not have sustainability as its target pursuant to Section 6 of the EU’s Sustainable Finance Disclosure Regulation (SFDR).