ATP Raises Pensions
By Giovanni Legorano, Global Pensions
Danish pension fund giant ATP has confirmed its commitment to raise all current and future pensions by 2%, despite reporting a 1.4% loss on its investment return for the first nine months of 2008.
ATP estimated the payment increase at DKK5.9bn (US$1.03bn) for its more than 690,000 current and future pensioners.
The fund claimed the combined effects of diversification of investments between different assets and hedging of equity- price losses, in particular, had cushioned the investment return.
It added price falls on domestic equities and emerging market equities mainly dented ATP’s results. ATP lost 14.7% on equities, while the equity markets had plunged by 20-30% on average during the first three quarters.
Lars Rohde, CEO, ATP, said: “Q3 has been quite a challenging quarter for ATP and results in the red are obviously not satisfactory. However, I am pleased to see that our strategy of hedging against equity price falls and increasing our risk diversification actually works.”
ATP said losses were contained by generating a profit on three out of five asset classes, while financial instruments purchased to hedge the equity exposure generated a net return of DKK6.2bn (US$1.08bn).
In addition, ATP posted a 17.9% investment return on oil investments.
During the first nine months of the year, ATP said DKK6.2bn (US$1.08bn) in pension benefits were paid to scheme members, up DKK554m (US$96.74m) on the same period last year.
ATP said in August it would raise all pensions and pension commitments. At the time, it revealed it had recorded a net loss of DKK7.3bn in the first half of 2008
Information on World Pension Issues
Copyright © Global Action on Aging