PFA receives reprimand and enforcement order from the Danish FSA

The Danish Financial Supervisory Authority has reprimanded PFA for sending out information material that does not comply with Sections 3 and 4 of the Danish Executive Order on Good Business Practice for Financial Undertakings.

The Danish FSA has ordered PFA Pension to revise all future information material used in situations where a customer can deselect a plan agreed between PFA and an organisation/employer. The information material must be revised in such a manner that it provides a balanced description of advantages and disadvantages associated with the new plan as well as the existing plan that the customers can choose to keep.

Dorthe Bundgaard, Director of PFA’s Legal Department, says that PFA will take note of the Danish FSA’s decision.

“This is a matter of a specific and atypical pension plan conversion as it was up to the individual customer whether the future payments were to be made to a market rate plan or to continue towards an average interest rate plan. It is common practice that the company or organisation decides whether all future payments are to be made to a market rate plan, and, subsequently, the individual employee or member only decides whether the existing deposit should be transferred to a market rate plan or remain in the average interest rate plan," says Dorthe Bundgaard and adds:

“Under normal circumstances, our communication with the customers concerning choosing between a market rate and an average interest rate plan is excellent and balanced. However, we acknowledge that, in this particular and atypical case, the information has not been sufficiently balanced between the advantages associated with making future payments to the existing average interest rate plan and the advantages of choosing a new market rate plan. We will review our processes and ensure that it does not happen again. In addition, we will enter into dialogue with the organisation in question concerning preparation of new information material for its members.”