ATP’s new pension model: Investment-driven liabilities in practice

Date: March, 2008

Authors: Michael Preisel (ATP), Søren Fiig Jarner (ATP) & Chresten Dengsøe (ATP)

Abstract: 

In February 2008 the Danish parliament passed an amended ATP Act under which market value principles will be applied to the accrual of pension rights. New ATP contributions will be split into two parts: a ‘guarantee contribution’, which will accrue to provide a guaranteed, lifelong pension; and a ‘bonus contribution’ to ATP’s bonus potential, which is ATP’s investment buffer. The new model will thus directly bolster ATP’s investment freedom, and is therefore a specific example of investment-driven liabilities.