Danish pension company, Sampension, has reported negative returns in the year-to-date, following “several years” of positive returns.

In an update, Sampension noted that a customer with 15 years until retirement and savings in market rate with moderate risk had a return of -6 per cent in 2022, as at the end of August.

It noted that, for several years, returns on customer’s pension savings had been positive, with negative returns not on the cards, but that this was not the case this year.

Sampension partly attributed the negative returns to rising inflation, which had caused central banks to raise interest rates.

This resulted in lower purchasing power for consumers and higher production costs for companies, which in turn led to a slowdown in the economy that was reflected in pension scheme returns.

"2022 has so far been a difficult year with falling share prices and sharply rising interest rates,” said Sampension deputy investment director, Jesper Nørgaard.

“Before the war in Ukraine, the world was heading for a solid economic recovery after Covid-19.

“The war and bottlenecks in the supply chains, which have been exacerbated by shutdowns in China, have led to increased uncertainty, rising inflation and a slowdown in the economy.”

Sampension added that although the new situation was not so encouraging, it was among “the best in the industry” at limiting the losses.

“There are several reasons why we have done relatively well,” Nørgaard stated.

“This is mainly due to investments in e.g. forests, properties and in renewable energy such as wind farms and biogas plants.

"If we look back just one or two years, there were significant positive returns. But everything indicates that we must prepare for a time when it is difficult to achieve positive returns.

“However, we do our very best to invest wisely and ensure the best possible returns in the difficult markets.”

Share Story: