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Pensions must change

Year after year, Denmark claims the top spot as the world's best pension system. But what got us here won’t be fit for the future. As we live longer than ever, pensions will need a new perspective and innovative models in terms of cost, ethics, active ownership and added value.

In the face of this changing world full of new requirements for the pension model, how can incumbent pension providers adapt and survive?

Cost is still crucial

In an investment environment characterised by continuous low interest rates that make it difficult to generate significant returns, the cost for the customer will continue to be a significant competitive driver. More people are aware of how much of their return that is going on the cost of administration. They want more agile models with much less administration.

Ethical investments are gaining ground

Customers are demanding ethical and morally correct investments for their pension money. This means you need to show consideration for both environmental and social issues. We already see many pension funds have individual portfolios covering exclusively ‘green’ investments. And some pension funds completely disregard investments in less ethical investments, such as companies that produce weapons.

Active ownership

The pension sector is becoming more open, increasing competition. This will also increase transparency, making it easier for customers to decide where their pension is invested. Pension funds must be better at communicating what they stand for. Not only with respect to returns, but also in relation to things like sustainability, active ownership, cheap administration and premium services.

Added value is winning customers

The struggle for pension customers continues, so several pension funds are trying to make pensions more interesting and relevant to people. This typically means developing value-added services, such as offering lectures with well-known sports personalities and politicians or giving discounts at partner organisations. 

PA is part of Life Insurance and Pensions Conference 2019

We’re proud to be part of the thirteenth annual Life Insurance and Pensions conference on 18-19 September 2019. The conference brings together leaders and industry experts to discuss the latest trends and developments in life insurance and pensions.

This year, Simon Rath, PA financial services expert, will moderate the discussions between more the 120 attendees.

Find out more

Contact the author

Financial Services - DK

Richard Grint

Richard Grint

Martin Tillisch

Martin Tillisch


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