The ATP Group Annual Report 2012

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Management's Review Business Model Risk Pension Hedging and investment Hedging Investment Administration Social Responsibility The ATP Group Financial StatementsPredictable pension – for lifeMost elderly Danes only have ATP Lifelong Pension to supplement their state funded old-age pensionATP members at year-end 2012Average annual ATP Lifelong PensionTotal number of members 4,782,900No. of members above pensionable age 997,100- of whom receiving a current pension 879,400- of whom paying contributions in 2012 88,500Annual pension in DKK20,00015,00010,0005,000All pensioners65-year-old pensionersNo. of members below pensionable age 3,785,800- of whom paying contributions in 2012 3,013,5000Women Men TotalATP Lifelong Pension helps to provide basic financial securityfor virtually all Danish pensioners. For more than 50 percent of Danish old-age pensioners, ATP Lifelong Pension istheir only source of supplementary pension income. For thegreater part of other pensioners, ATP is part of the foundationupon which other pensions rest.viders have decided to end or weaken pensions. The guaranteeelement is as a fundamental prerequisite for the basicsecurity that ATP is to help provide. Therefore, ATP LifelongPension remains a guaranteed, predictable pension.ATP has demonstrated that guarantees and high returns arenot mutually exclusive.More than 91 per cent of the Danish population aged 25-60 years paid ATP contributions in 2012, thus accruing ATPLifelong Pension rights. One in five Danes aged between 25and 60 do not contribute to pension schemes other thanATP.About 86 per cent of Denmark's more than 1m old-age pensionersreceive ATP Lifelong Pension.In 2012, ATP's payouts totalled just under DKK 11,9bn, withcurrent pension benefits accounting for DKK 11.0bn. ATP receivedcontributions totalling DKK 8.6bn from wage earnersand recipients of transfer income.In recent years, payouts have been exceeding contributions,which is a reflection of the maturing of the ATP scheme. Thematuring process will continue over the coming decades,and, other things being equal, the gap between ATP's contributionsand payouts will gradually widen.ATP is committed to guaranteesDuring recent years, an increasing number of pension pro-DKK 11bn paid in pension benefitsIn 2012, eight in ten old-age pensioners were able to supplementtheir state old-age pension with ATP Lifelong Pension.ATP paid a total of DKK 11bn in lifelong old-age pensionsand, at end-2012, 879,400 ATP members were receiving lifelongpensions from ATP.The full ATP Lifelong Pension for a 65-year-old pensioneramounted to DKK 24,300 in 2012, equivalent to 35 per centof the basic amount of the state funded old-age pension.The full ATP Lifelong Pension was paid to members who hadpaid the full ATP contribution from 1964 until retirement.The average ATP Lifelong Pension was approximately DKK13,000 a year. ATP members retiring at age 65 in 2012 receivedATP Lifelong Pension benefits averaging DKK 15,700a year.There is fairly significant variance in the ATP benefits paidto members. Younger pensioners, in general, receive morethan older pensioners because they have been able to accruepension rights over a longer period of their workingThe ATP Group – Annual Report 201228
Management's Review Business Model Risk Pension Hedging and investment Hedging Investment Administration Social Responsibility The ATP Group Financial StatementsPension payouts in 2012ATP contributions in 2012NumberDKK millionDKK millionCurrent old-age pensions 909,200 11,012- personal pensions 900,100 10,983- survivor pensions 9,100 29Lump-sum benefits 23,200 891- personal pensions 3,700 70- spouse/common-law partnerbenefits 16,600 676- child benefits 2,900 145Total contributions 8,554Of which in respect of:- people in employment 6,285- recipients of unemployment, sickness ormaternity/paternity benefits 1,162- recipients of disability pension 504- recipients of early-retirement pension 138- recipients of other transfer incomes 312- SUPP deposits 153Number of contributing employers 153,900lives. ATP was set up in 1964, and at that time many of theolder current pensioners had already been working for severalyears. Men generally receive more than women becauseof the higher employment rate of men – especially among thecurrent older generations.In 2012, just over 3.1m members paid contributions to ATP,thereby accruing new lifelong pension rights. Contributionstotalling about DKK 8.6bn were paid into the ATP scheme in2012, some 25 per cent of which by recipients of transfer incomeSurvivor benefitsThe ATP scheme provides insurance for dependants of deceasedATP members in the form of survivor benefits. If anATP member dies before reaching pensionable age, his or hersurviving spouse or registered common-law partner is generallyeligible for a lump-sum benefit of DKK 50,000. Childrenunder the age of 21 are generally eligible for a similar amount– irrespective of the age of the deceasedIn 2012, 16,600 surviving spouses and common-law partnersreceived lump-sum survivor benefits from ATP. This numberhas stayed fairly constant for a number of years. Betweenthem, the spouses and common-law partners received DKK676m. 2,900 children of deceased ATP members receivedlump-sum benefits totalling about DKK 145m.DKK 8.6bn paid in contributionsThe ordinary annual ATP contribution, unchanged since 1January 2009, is DKK 3,240.For many years, a number of public-sector bargaining agreementshave provided for lower ATP contributions. In 2008, itwas decided to implement a gradual process to ensure thatall public-sector employees will eventually receive the sameATP lifelong pension benefits as those guaranteed to wageearners in the private sector.This process was continued as part of the 2011 round of collectivebargaining in the public sector. As a result, all affectedgroups started paying higher contribution rates at the beginningof 2012.The most recent adjustment of the ATP contribution was in2009. While the adjustment of the contribution rate has littleeffect on ATP pensions in the short term, continuous adjustmentis essential for pensions in the long term. In a maturepension scheme such as ATP, failure to adjust contributionswill translate into a reduction in the purchasing power of futurepensioners.The ATP Group – Annual Report 201229
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The ATP Group Annual Report 2012

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