Denmark’s statutory pension provider ATP has reported an “expected” return of 3 per cent, in the first half of the year.

Publishing its interim results, ATP said the first half of 2024 was characterised by both rising equity prices and rising interest rates in the bond markets. This gave ATP a return on investment of 3 per cent in the investment portfolio, which is ATP's reserves.

“Overall, we delivered an expected result in the first half of the year. The return on equities was very satisfactory. On the other hand, rising interest rates led to a loss on our bonds. Both are reflected in the result, which I would describe as expected and generally acceptable in view of market developments,” ATP CEO, Martin Præstegaard, said.

ATP said the investment portfolio generated returns (before expenses and tax) of DKK 3.3bn, which after expenses is equivalent to 3 per cent of the bonus potential.

The biggest positive contributions came from investments in Danish and international equities, while bond holdings pulled the result down. Over the past 10 years, ATP has generated a return of DKK 117bn in its investment portfolio.

The total result from investment and hedging after tax of DKK 0.9bn has been transferred to the bonus potential along with a pool of DKK 1.6bn in connection with the life expectancy update for the year.

Regarding ATP's free funds, — the bonus potential — stood at DKK 108bn at the end of the half year and pension liabilities stood at DKK 549bn. The bonus capacity increased by 1.3 percentage points to 18.4 per cent and is on par with the average of the past 10 years.

“We promise Danes a certain pension that will last a lifetime. At the same time, we have assets we can invest freely. When the relationship between the two – liabilities and free funds – develops positively, our bonus capacity increases. This is good for the Danes, as it increases the likelihood that we will be able to raise their ATP retirement benefit in the long term,” Præstegaard said.

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