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The deposit interest rate is the interest rate paid to the average rate pension schemes. 

As a main rule, the deposit interest rate is determined annually, but it may be adjusted upward or downward during the year due to e.g. substantial changes the financial markets.  

The deposit interest rate is determined on basis of the previous years' actual returns (in DKK) and the pension funds financial situation.

Overall, the pension fund has two types of pension schemes:

  • Pension schemes with a deposit interest rate
  • Pension schemes on market rate

The pension schemes with a deposit interest rate can be divided into:

Schemes with a non-guaranteed supplementary pension (new schemes):

  • P+ Regulations 2019
  • P+ Regulations 2011, former DIP Regulations 4
  • P+ Regulations 2007, former JØP Regulations 2 and the following pension products in P+, former JØP: annuity certain, retirement insurance, Pension Udland, Ratepensin Udland and supplementary retirement pension (Regulations 2). 

Schemes with only a basic pension (old schemes):

  • P+ Regulations 1983, former DIP Regulations 1
  • P+ Regulations 1999, former DIP Regulations 2
  • P+ Regulations 1973, former JØP Regulations 1 and supplementary retirement pension under Regulations 1

Read more about the supplementary and basic pension here

You can find your deposit interest rate on Min pension under Opsparing.

The Board normally determines the deposit interest rate annually at year-end on basis of the pension fund's financial situation at the beginning of November. The deposit interest rate is the annually interest payment to the members' deposits. 


The different pension schemes have different deposit interest rates. This is due to the different risks linked to the pension commitments on the different schemes. 


The deposit interest rate is determined before tax due to the rules on individual pension return tax which is paid from the individual member's savings after the pre-tax interest rate has been added. 

The pension schemes with a non-guaranteed supplementary pension are:

  • P+ Regulations 2019
  • P+ Regulations 2011, former DIP Regulations 4
  • P+ Regulations 2007, former JØP Regulations 2 and the following pension products in P+, former JØP: annuity certain, retirement insurance, Pension Udland, Ratepensin Udland and supplementary retirement pension (Regulations 2). 


The new schemes in P+, which include supplementary pensions, are adjusted according to a model which combines the best from an average pension scheme with the benefits of a market rate pension scheme. 


The adjustment method guarantees the members a fair share of the pension fund's return. As it is the actual returns that are leveled, it implies that the pension benefits can be adjusted both upwards and downwards if the return does not meet the expectations. However, the fluctuations are far more modest compared to absolute market rate schemes. This applies both when you are saving, and when the pension is paid. 


You can read more about how the pension benefits are adjusted based on the deposit interest rate here


You can read about the supplementary pension here

 

Schemes with an unconditional basis are:

  • P+ Regulations 1983, former DIP Regulations 1
  • P+ Regulations 1999, former DIP Regulations 2
  • P+ Regulations 1973, former JØP Regulations 1 and supplementary retirement pension under Regulations 1


For pension schemes with an unconditional basis, the deposit interest rate might be lower than the basic interest rate, and in that case your pension benefits are not reduced as you have a guarantee. 

 

When interest payment to the deposit does not equal the rates ascribed to the bases, it means that the pension fund must set aside extra funds to be able to meet the guaranteed benefits. These extra provisions are financed by the basic own funds. Again, this means that the pension fund sets aside funds to pay your pension benefits which are calculated on basis of the different basic interest rates. 

 

In the annual report for 2019 (note 6, page 65) your can see the funds transferred from the basic own funds. You do not have the right to having these funds ascribed to your deposit as you do not have an interest rate guarantee, and the disbursements must be returned to the basic own funds in case of a later surplus. If there is no surplus, the extra provisions are used for paying the guaranteed benefits. 

 

You can read more about adjustment of the pensions based on the deposit interest rate here