Investment policy

LD is a closed fund which does not admit new members and does not receive new contributions.

This implies that the assets are likely to be reduced each year except in periods with large investment returns. LD is under long-term liquidation which is decisive for the fund's strategy. LD's board continuously discusses the future strategy of LD and makes decisions about initiatives which will ensure that LD's long-term liquidation happens in a way which always benefits the interest of the members.

LD's investment policy is based on the expected development of the members' assets. Each year, LD prepares multi-annual forecasts for the asset development. The forecasts are presented to LD's board. LD operates with a main scenario where disbursements to members develop in line with the latest registered development. It is expected that LD's assets will decline by approx. 25 per cent over the next five years and by approx. 50 per cent over the coming 10 years.

The investment policy is designed with due consideration to the uncertainty which is connected with the disbursements to the members. These disbursements, which consist of pension benefits paid as a lump sum or transfers to other institutions, vary from year to year, but are generally expected to be in the range of € 500 to 600m. per year.

LD must take into consideration that nearly 47 per cent of the assets belong to the members above 60 and thus in principle may be payable with relatively short notice. LD has no influence on this, and this also applies to members who wish to transfer their savings to another pension scheme.

During the previous years LD has made considerable changes in the investment portfolio in order to adjust it to the expected disbursements and to reduce risks. In LD Discretionary the equity and property investments have been reduced by approx. € 3 bn. in the period from 2004, when the LD Act was amended. The large divestment of stocks and property has contributed to a reduction in the share of equity from 52 per cent at the beginning of 2004 to about 35 per cent at the end of 2013.

LD has already undertaken considerable adjustments to ensure that the assets have become less risky and also easier to convert into liquid funds. It is intended that LD, also in the future, will strive to balance return, risks and liquidity to ensure that the remaining members  receive satisfactory return on their savings. Members who have specific requirements to the investments are able to choose investment pools.