PFA Invests

Profile Cautious

Profile Cautious is for you who want PFA to invest your savings with very low risk, and thereby accepts a low expected return.

You can select how the savings in the profile should be distributed between PFA’s standard pension solution, PFA Plus and PFA’s climate-focused savings solution, PFA Climate Plus, in which the focus is on the green transition and the carbon footprint.

Please note that you are no longer able to select Profile Cautious. 

 

PFA Invests

PFA Invests is a so-called market rate product, in which your return fluctuates with the rate of PFA’s investments in the financial markets, and where you carry the risk of these fluctuations. If you receive pension payments, these may also fluctuate depending on the regular returns of the finance markets, changes in longevity etc. 

With PFA Invests, you do not need to acquaint yourself with e.g., stocks, bonds, the housing market, interest rates or alternative investments. The only thing you need to do is to select which risk you are willing to take concerning your expectations for return, PFA then manages the investments of your savings. 

PFA Profile Cautious is for you who want a very low risk and are therefore also prepared for a low expected return. If you want a higher expected return and with that greater investment risk, you can read about Profile Low, Profile Medium and Profile High here.

With Profile Cautious the risk will automatically be reduced as you approach your retirement date. Read more about gradual reduction of risk at the bottom.

Do you have the profile that suits you?

Profiles Low, Medium and High have different potentials for great returns and involve different degrees of investment risk. Profile Cautious comes with the lowest risk and the lowest potential for a high return. Profile High has the greatest possibility of a high return – but also the highest risk.

All investment profiles are based on a distribution between PFA’s Low risk funds, which include bonds, properties and other similar investments, and PFA’s High risk funds, which include shares and other similar investments. The higher the risk of the investment profile, the greater the share of investments placed in the High-risk funds.

Log on to My PFA to view your investment profile. Your options depend on the agreement that you, your employer or organisation have with PFA. At My PFA, you can also view your options, and you can go through the Investment Guide and get help to make your investment selection.

  
 
Profile Cautious

Ca. 25 per cent of your savings is invested in the High-risk fund and approximately 75 per cent in the Low-risk fund.

The distribution indicates the risk in the investment profile before gradual reduction of risk, which begins 9 years before retirement. At retirement, the investments in the High-Risk fund are gradually reduced to approximately 10 per cent.

With Profile Cautious, you have the option to add payout protection cover, which can provide a certain security for your payouts, thereby reducing the investment risk further. We usually do not recommend this, as it will worsen your return potential.

If you today have Profile Cautious and choose to switch to another investment profile, you will not have the option to select Profile Cautious again, unless this is stated by your terms and conditions of pension.

 
 


   
 

Return – PFA Invests

Below, you can see the return on Profile Cautious illustrated with different time horizons until retirement.

 The illustrations below show two different rates of return:
  • Customer return: The return generated by the investments in the investment profile including the expected interest on Individual CustomerCapital.
  • Investment return: The return generated by the investments in the investment profile. Individual CustomerCapital is not included in the investment return.

The below figures are based on standard assumptions and will therefore deviate from the specific return that will be added to your plan as the return on your plan depends on your payments, payouts etc. You can see the return that will be added to your own savings at My PFA.

Choose between Customer return and Investment return. Also please choose PFA Plus or PFA Climate Plus.
  

PFA Plus and PFA Climate Plus asset allocation - Profile Cautious

Follow the link below to see how PFA invests your pension savings in relation to Profile Cautious.  

See the asset allocation for Profile Cautious

Gradual reduction of risk

Regardless of which investment profile you have chosen, your investment risk will be reduced gradually as you approach your retirement date. If you have chosen Profile Low, Medium or High, the gradual reduction will continue after you have retired. This is to reduce the risk of large fluctuations in your savings in the latter part of the savings period.

Here, you can read about how the gradual reduction happen in Profile Cautious.

 

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 fluctuate the most – which means that the risk is higher.

 

 

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. After retirement, there will be no further reduction of your investment risk.

With a market rate savings plan, your pension payouts will vary year to year. When your payouts are about to start, we will, as a rule, fix your monthly payout until the end of the year. Hereafter, the pension payouts are generally regulated every 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). The payouts may for example rise or fall depending on the actual return of the year among other things. Payout of life pension also includes the assumptions of 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 payouts.

 

Risk labelling

Risk is necessary to generate a return
We invest your savings in securities such as bonds, equities, properties etc. We do so to make your savings grow and, in that way, ensure you as large a payout as possible when you retire.

When investing in securities, the value of your savings may fluctuate from one year to the next. This is called investment risk.

In order to make it easier for you to understand and compare the risk on your pension savings, all pension products in the market rate environment are “labelled” with a risk value between 1.0 and 6.0:

  • Risk values between 5.0 and 6.0 represent the highest risk. Here, your savings may fluctuate significantly from one year to the next.
  • Risk values between 1.0 and 1.9 represent the lowest risk. Here, fluctuations will usually be less pronounced.

The risk value is calculated for all market rate products in PFA Plus and PFA Climate Plus, including Profile Cautious.

Below, you can see the risk values of the various market rate products with and without PFA CustomerCapital.

PFA Plus, PFA Klima Plus og PFA Valgfri er opdateret 31. december 2024. 

 

My Pension risk

On the website ”Min Pensionsrisiko” (in Danish), you can find the risk labelling of all companies compared to the benchmark, which is an average of all pension companies’ risk values for low, medium and high risk respectively.

Read more here

Benchmark

F&P calculates benchmark for high, medium and low risk for display in F&P’s benchmarking tool. Benchmark is calculated for every year. Benchmark is calculated as a simple (unweighted) average of the risk value. All companies with life cycle product are included in the calculation of benchmark.

It is the same benchmark that is included in the graphs below.

Read more at F&P's website here

Risk-classification of the new profiles

Based on the Insurance and Pensions’ risk bands, the profiles are risk-classified as follows:
Profile Cautious: Low risk

Short-term and long-term risk

Pension savings entail two types of risk. The short-term risk illustrates how much the value of your savings may usually fluctuate during the next year. And the long-term risk illustrates the level of uncertainty related to your future payouts when you retire.

The risk value is only an expression of the short-term risk – i.e. how much the value of your savings may usually fluctuate during the next year.

The risk depends on your age

When the risk is high, the return expectations are also high. Therefore, most pension plans entail a high risk while the customer is young. While the customer is young, there is time to regain any losses sustained during years with negative developments on the financial markets.

When the customer gets older, there is less time to regain any losses sustained. Thus, most pension plans gradually reduce the risk as the customer gets older.
 

Risk marking of Profile Cautious
  

Risk marking of Profile Cautious with PFA CustomerCapital

In the investment profiles in PFA Plus, the risk is gradually reduced as retirement approaches. This is illustrated in the figure and table, which shows the risk value of Profile Cautious depending on years until retirement. In terms of risk, PFA CustomerCapital is placed with 5 per cent in Global Equity. Read more about PFA CustomerCapital and see your precise part in CustomerCapital at mitpfa.dk


 
  agE - bEFORE RETIREMENT
 Risk value up to and including 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
Profile Cautious 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.1 2.0 2.0 1.9 1.9 1.8 1.8 1.8 1.8 1.8 1.8 1.8



 

  
   AGE - aFTER RETIREMENT
 rISK VALUE 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 years and beyond
Profile Cautious 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8

Updated 1 April 2025

Risk marking of Profile Cautious without CustomerCapital

In the investment profiles in PFA Plus, the risk is gradually reduced as retirement approaches. This is illustrated in the figure and table, which shows the risk value of Profile Cautious depending on years until retirement.

 
   Age - before retirement
 Risk value up to and including 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
Profile Cautious 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.0 1.9 1.9 1.8 1.8 1.7 1.7 1.7 1.7 1.7 1.7 1.7



 

   Age - after retirement
 Risk value 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 years and beyond
Profile Cautious 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7

Updated 1 April 2025

 
Risk marking of PFA Climate Plus Profile Cautious
  

Risk marking of Profile Cautious with CustomerCapital

In the investment profiles in PFA Plus, the risk is gradually reduced as retirement approaches. This is illustrated in the figure and table, which shows the risk value of Profile Cautious depending on years until retirement. In terms of risk, PFA CustomerCapital is placed with 5 per cent in Global Equity. Read more about PFA CustomerCapital and see your precise part in CustomerCapital at mitpfa.dk

 
   Age - Before retirement
 Risk value up to and including 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
Profile Cautious 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1.9 1.9 1.8 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7



 

   Age - after retirement
 Risk value 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 years and beyond
Profile Cautious 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7

Updated 1 April 2025

Risk marking of Profile Cautious without CustomerCapital

In the investment profiles in PFA Climate Plus, the risk is gradually reduced as retirement approaches. This is illustrated in the figure and table, which shows the risk value of Profile Cautious depending on years until retirement.

 
   Age - before retirement
 Risk value up to and including 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
Profile Cautious 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.8 1.8 1.7 1.6 1.6 1.6 1.6 1.6 1.6 1.6



 

   Age - after retirement
 Risk value 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 years and beyond
Profile Cautious 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6

Updated 1 April 2025

 

Payout protection cover

Customers who have Profile Cautious or Profile Low can select the additional 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 ¬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 both 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. Therefore, PFA generally does not recommend opting for payout protection cover.

Please note that payout protection cover may lapse or change in certain situations. 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 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).

Example of asset allocation for a customer with payout protection cover (only applies to Profile Cautious)

If you have selected payout protection cover, we generally phase the cover gradually onto your savings during the last ten years prior to your expected retirement. Concurrently with this, a larger part of your savings will gradually be placed into specific funds with very low risk ¬called duration funds.

The special duration funds that are applied for payout protection cover are, under normal market conditions, expected to generate a lower –in some cases significantly lower – return than both the High-risk funds and Low-risk funds, which are the funds on which your savings without payout security are distributed. Therefore, payout protection cover is expected to result in a lower pension. If you have selected that a part of your savings must be placed in PFA Climate Plus, this does not apply to the part that is placed in duration funds. 

Below you can see examples of asset allocations for Profile Cautious with payout protection cover. We emphasise, that it is examples – the actual shares may deviate.

 

PFA Climate Plus – an option that further the green transition

With PFA Climate Plus, you can select that a part of or your total pension savings will be invested with extra focus on climate and furthering the green transition.

This is done through three climate criteria:
 

Increased focus on CO2

The PFA Climate Plus equity portfolio must emit 60 % less CO2 than the world equity index measured across the full value chain1.

Exclusion of oil, coal and gas

Oil, coal and gas companies are excluded i.a. by following the exclusion criteria of the EU Paris-Aligned Benchmark (PAB) in the equity portfolio2.

Carbon-neutrality in 20253

The ambition is for the investments in PFA Climate Plus to be carbon-neutral by the end of 2025 and carbon-negative4 by the end of 2030 measured by scopes 1 and 2

 
Please note that investments that support a low carbon footprint are not necessarily sustainable in themselves.

  
1MSCI All Countries World Index, CO2 is measured using scopes 1, 2 and 3.
2Defined by Article 12 “Exclusions for EU Paris-aligned Benchmarks”, COMMISSION DELEGATED REGULATION (EU) 2020/1818 of 17 July 2020.
3The ambition is to be achieved by investing in forestry and technology that capture CO2 from the atmosphere.
4Carbon-negative means that the underlying investments remove more CO2 from the atmosphere than they emit.

Read more about PFA Climate Plus

Sustainability-related disclosure

PFA Plus investment profile A

 

  
     
PFA Climate Plus investment profile A

 

  

    

PFA recommends Profile Medium

When it comes to risk appetite, everyone has their own preferences. Your choice of investment profile impacts your pension savings and with that your future, and therefore the ratio between risk and return should be just right for you.

Generally, we recommend that our pension customers choose Profile Medium, as it is our assessment that for the clear majority of our customers, this profile has the most appropriate balance between risk and return.
That said, we know, that the choice of profile is a question of personal temperament and that it among other things depends on your financial situation and total long-term savings. Therefore, the profiles Cautious or Low may be a better option for you, who prefer a lower investment risk. Meanwhile Profile High can be the right choice for you, who prefer to invest your savings with the potential for higher return.

Get an immediate recommendation
Listen to investment specialist, Carsten Trier, explain more about PFA Invests

Low, Medium or High. Which profile is the best match for you? You can quickly find out by answering a few simple questions at My PFA about your return expectations and your risk appetite. All you need to do is log on to My PFA and find the guide under Investments.

Try the Investment Guide