In 2024, members with accrued holiday allowance funds were credited with a return of 11.0% after pension return tax and costs, whilst members with accrued cost-of-living allowance funds in the main LD Discretionary pool achieved a return of 8.1% after costs. Over the past two years, members have received returns of 22.2% and 18.9% on their holiday allowance funds and cost-of-living allowance funds respectively.
I am delighted that, once again this year, we have significantly boosted our members’ savings. Our members have benefited from the fact that the global economy – and the equity markets in particular – have performed well despite wars and conflicts around the world.
Global equities delivered substantial gains
The biggest contributor to this year’s results was the global equity markets, where the rise was primarily driven by the largest US technology companies, the so-called ‘Magnificent 7’. Danish shares, which make up a small proportion of the equity portfolio, ended the year with a slight loss.
Following significant capital losses in 2022, when interest rates rose, the bond markets delivered solid returns in 2023. This was also the case in 2024, when inflation eased and the major central banks began to ease monetary policy following several years of tight financial conditions. This led to lower short-term interest rates in 2024. Robust economic growth and rising risk appetite also contributed to healthy returns on credit investments. This positive development was particularly significant for members of the ‘dyrtids’ scheme, as bond and credit investments account for around three-quarters of the main pool of LD Discretionary’s investments
In 2024, LD Pensions expanded its investment universe to include listed alternative investments and, at the same time, launched new initiatives in government bonds from developing countries. At the same time, we increased the level of risk in the employees' holiday allowance fund.
“Our portfolios are already broadly diversified to spread risk and capitalise on opportunities across markets and asset classes. And in 2024, we took further steps to diversify our investments, so that we are even better positioned to meet the opportunities and challenges of the future,” says Lars Mayland Nielsen, Managing Director of LD Pensions.
Stable membership assets despite payouts
At the end of the year, the total member assets in LD Pensions stood at DKK 46.7 billion, an increase of DKK 0.3 billion compared with the previous year. Member assets in The Holiday Allowance Fund rose to DKK 22.4 billion, driven by high returns. At the same time, we are seeing more members eligible for payouts choosing to keep their holiday allowance funds in the fund. For the Cost-of-Living Allowance Fund, assets fell to DKK 24.3 billion, mainly due to larger payouts, whilst positive returns helped to limit the decline.
Key facts
- At the end of 2024, there were 645,000 members of the Holiday Allowance Fund and 360,000 members of the Cost-of-Living Allowance Fund.
- LD Pensions’ total assets amounted to DKK 46.7 billion, comprising DKK 24.3 billion held by the Cost-of-Living Allowance Fund and DKK 22.4 billion held by the Holiday Allowance Fund at the end of 2024.
- In The Cost-of-Living Allowance Fund, members were able to choose between six different investment pools in 2024. At the end of the year, 89 per cent of the assets were invested in the main pool, LD Discretionary.
- In The Holiday Allowance Fund, the entire assets are in the same investment fund. The return is attributed after deduction of pension return tax and costs.
