IDEAS home Printed from
   My bibliography  Save this paper

A short note on the ATP fund of Denmark


  • Vittas, Dimitri


The Danish ATP (Arbejdmarkedets TillaegsPension or Labor Market Supplementary Pension) fund is a public pension fund that was created in 1964 to complement the universal pension benefit that is financed from general tax revenues and is paid to all old-age residents. When it was created, participation in ATP was compulsory on most working people. But over the last decade or so compulsory coverage has been expanded to most recipients of transfer income. Contribution amounts are set in absolute terms, but are low relative to earnings (less than 1 percent of average earnings). ATP has benefited from scale economies and compulsory worker participation and has been able to operate with high efficiency and low costs. Its investment performance has been uneven over the years, reflecting the applied investment policies and rules as well as prevailing financial conditions. In recent years, it has been a leader among Danish pension institutions in adopting innovative investment policies and has enjoyed an enviable record of high investment returns and low operating costs. In addition, it has long offered deferred group annuities with guaranteed benefits and periodic bonuses (with profits policies). However, ATP also suffers from several weaknesses and shortcomings. It has a cumbersome governance structure, rooted in labor market relations and the role of social partners, while its group annuities have been based on rather'idiosyncratic'risk-sharing arrangements. Nevertheless, it took the lead in using long-dated interest-rate swaps in euro markets and recently created a department that specializes in hedging its pension liabilities. And it is in the process of adopting a new plan for guaranteed benefits that aims to enhance the management of both investment and longevity risks.

Suggested Citation

  • Vittas, Dimitri, 2008. "A short note on the ATP fund of Denmark," Policy Research Working Paper Series 4505, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4505

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Vittas, Dimitri & Impavido, Gregorio & O'Connor, Ronan, 2008. "Upgrading the investment policy framework of public pension funds," Policy Research Working Paper Series 4499, The World Bank.
    2. Andersen, Carsten & Skjodt, Peter, 2007. "Pension institutions and annuities in Denmark," Policy Research Working Paper Series 4437, The World Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item


    ; Debt Markets; Emerging Markets; Investment and Investment Climate; Pensions&Retirement Systems;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4505. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.