Danish pension fund ATP’s Livslang Pension generated DKK 1.4bn in returns during the first six months of 2023, according to its half-year report.

The improved return was primarily attributed to positive developments in equity markets, while ATP’s alternative asset investments “did not contribute significantly”.

ATP’s reserves, or bonus potential, amounted to DKK 105.2bn at the end of June 2023, while its pension liabilities totalled DKK 542bn.

Its bonus capacity, which represents the relationship between the value of the bonus potential and ATP’s total liabilities, was 18.2 per cent at the end of H1, in line with the average for the past 10 years.

The pension fund noted that, after “a challenging 2022”, its results improved “significantly” in the first six months of 2023.

However, from a technical accounting perspective, the ATP Group still has a result of zero for the period because, as of this year, ATP has implemented and is now following the new international accounting standard IFRS 17.

The new accounting rules have an impact on the way ATP calculates, measures and presents its pension liabilities, and aim to create transparency regarding pension and insurance companies’ earnings.

Under the new rules, ATP’s assets and returns belong to its members, so ATP has no equity.

Therefore, under the new rules, ATP’s total result is technically zero when calculating the hedging, investment, and insurance service business areas.

In total, ATP generated a result of DKK 2.8bn in hedging and investment during H1.

This result, alongside a DKK 1.9bn change in the provisions due to a decrease in projected life expectancy, has been transferred to the bonus potential, which amounted to DKK 105.2bn at the end of June.

“I am satisfied that we have put a difficult 2022 behind us,” said ATP CEO, Martin Præstegaard.

“Our returns are now positive, and the investment strategy gives ATP’s members a guarantee that they will be paid what we have promised them when they retire.

“Our hedging of interest risks means members can rest assured that we have the money we need to meet our commitments.”

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