How will the corona crisis affect your pension?
Updated on 19 May 2020
The financial markets plummeted in March in response to the spread of COVID-19. By end-March, when things were at their worst, the global equity markets had lost more than 30%. Since then, the markets have recovered about 50% of the loss. The markets are recovering on indications that the spread of the virus has culminated, which is causing more and more countries to implement or prepare a gradual reopening of their economies.
As we cannot be sure that the financial markets have factored in the full effects of a potentially protracted global economic crisis, PensionDanmark maintains its conservative investment strategy.
Your pension savings
If you are more than 10-12 years away from retiring, you have no reason to fear that the current market turmoil will have a significant effect on your pension benefits.
If you have already retired, the market fall may unfortunately have an adverse impact on your pension benefits.
- If the investment return for 2020 as a whole is negative, annuity pension benefits will have to be reduced. Based on the current investment return, we would have to lower your annuity pension benefits for 2021 by about 4-7%.
- As for life-long retirement pension benefits, our procedure is to set aside an amount when you retire that we can draw on in years of poor returns. Right now, the most likely scenario is that we will be able to maintain current life-long retirement pension benefit levels in 2021.