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Risk labelling

We invest your savings in several different assets, e.g. bonds, shares and real estate.

Risk and return are highly correlated
We invest your savings in securities, e.g. bonds, shares, real estate etc., to increase your savings and give you the highest possible outcome when you retire.

Investing in securities implies that the value of the savings may fluctuate year by year. This is called investment risk.   

See the risk on your pension savings
To make it easier for you to understand and compare the risk related to your pension scheme, all market rate pension schemes are 'labelled' with a risk value between 1.0 and 6.0:

  • The risk values between 5.1 and 6.0 are the highest risk values indicating that your savings may fluctuate a lot the next year.
  • The risk values between 1.0 and 1.9 are the lowest risk values indicating less fluctuation.

Short- and long-term risk
There are two types of risk in terms of pension savings. The short-term risk which shows how much the value of your savings may fluctuate during the next year. The long-term risk shows the uncertainty of your future benefits when you retire. 

The risk value is only evidence of the short-term risk - i.e. how much the value of your savings may increase or decrease during the next year.

The risk depends on your age
A high risk may offer the chance of higher returns. Accordingly, most pension schemes include a high risk at a young age. At a young age, there are many years to regain possible losses in years when the financial markets develop negatively. As you get on in age, there are fewer years to regain possible losses, and thus the risk in most pension schemes is reduced as the member approaches retirement. 

Compare the risk of your pension savings with the average 
Calculation of the risk value only applies to market rate products. Members subject to P+'s market rate product, P+ Life cycle, may choose among 4 risk profiles (High, Middle, Low and Sustainable). For each risk profile the risk - and accordingly the risk value - is gradually reduced approching the time for retirement. The difference between the risk profiles is partly the degree of risk and when it starts getting reduced and partly the level of sustainability. 

Here you can compare the risk in P+ Life cycle with other pension companies' market rate products. 

This tool is developed by Insurance & Pension Denmark which is the Danish trade organisation for insurance companies and pension funds.