LD Pensions, which manages cost-of-living and holiday allowance funds for just over 1 million Danes in total, has today published its annual report for 2023. It shows that members with accrued holiday allowance funds received a return of 10.1% in 2023, and that members with accrued cost-of-living allowance funds were credited with a corresponding return in the main fund, LD Discretionary. Over the past two years, members with holiday allowance funds and cost-of-living allowance funds in LD Discretionary have been credited with a total return of 1.4 per cent and 1.1 per cent respectively.
Positive returns across all asset classes in 2023
All asset classes made a positive contribution to LD Pensions’ returns in 2023, with global equities performing particularly well, even though the proportion of technology shares was slightly lower than in the benchmark. The equity strategy aims to generate long-term excess returns, and since its launch in 2021, the current strategy has delivered a higher return than the benchmark. Credit investments also generated double-digit returns, whilst the highest-rated bonds yielded a return of around 6%.
The strong performance in 2023, which more than offset the loss from 2022, demonstrates our ability to deliver value for our members. This is because we have low costs and a long-term investment strategy focused on risk diversification.
In 2023, the independent research firm Morningstar awarded the highest possible rating – 5 stars – to the main fund in the Cost-of-Living Allowance range, LD Discretionary. Around 90 per cent of the cost-of-living allowance funds are invested in LD Discretionary, which consists of a balanced portfolio with low to moderate risk.
The assets of LD Pensions grew
LD Pensions’ total assets grew by DKK 0.6 billion in 2023. This was due to positive investment returns, which more than offset the expected payouts to members. Holiday Allowance funds increased by DKK 1.2 billion, whilst the assets of the cost-of-living allowance funds were reduced by DKK 0.6 billion as a result of payouts. Consequently, total assets stood at DKK 46.5 billion at the end of 2023.
“The strong returns from both funds, and the fact that many long-standing members choose to leave their money with us even though they are entitled to payouts, have increased our assets. The results for 2023 are better than expected at the start of 2023, and we regard them as satisfactory,” says Lars Mayland Nielsen.
Read LD Pensions' annual report for 2023 here.
Go to the 2023 Annual ReportKey figures from the 2023 Annual Report
LD Pensions:
- Total members’ assets of DKK 46.5 billion.
- Profit after expenses and pension return tax of DKK 3.8 billion, comprising DKK 2.0 billion in the Employees' Holiday Allowance Fund and DKK 1.8 billion in the Cost-of-Living Allowance Fund
- Return on investment of DKK 4.3 billion, comprising DKK 2.4 billion in the Employees’ Holiday Allowance Fund and DKK 1.9 billion in the Cost-of-Living Allowance Fund.
The Holiday Allowance Fund:
- Members’ assets of DKK 21.3 billion
- 665,000 members
- Attributed return after costs and pension return tax of 10.1%
- 29 per cent of members’ assets held by employers and 71 per cent invested
The Cost-of-Living Allowance Fund:
- Members’ assets of DKK 25.2 billion
- 397,000 members
- Approx. 90% of the assets are in the main portfolio, LD Discretionary, with the remainder in other portfolios based on individual investment choices
- Attributed return in LD Discretionary of 10.1% after costs
