The ATP pension is one of the basic pillars of the Danish pension system

ATP’s role in the pension system is clear: To provide basic financial security together with the state pension with a guaranteed and fixed benefit for life. No matter how old one gets.

ATP is part of the basic amount provided to pensioners in the Danish pension system. More than 40 per cent of pensioners in Denmark have only their state pension and payment from ATP to finance their life as a pensioner. The labour market pensions that have grown for the people in active employment in Denmark over the past 20 years are non-existent for almost half of all current pensioners.

Together with the state pension, ATP Livslang Pension (Lifelong Pension) is the supporting pillar of the Danish pension system. The Danish pension system is built on three pillars: ATP Livslang Pension (Lifelong Pension) and the state pension, labour market pensions based on collective agreements and voluntary private pensions.

And this is where the ATP scheme that has been adopted by law is valuable - both for a lot of people in Denmark and for society at large. This is because the public pensions - the ATP and state pensions - play a far greater role in the finances of pensioners than the public debate seems to understand, both now and into the far future.

As the Danish ATP Act specifies, ATP must pay a lifelong pension that is guaranteed in terms of its size in kroner and ører. Specifically, this means that ATP as an investor chooses to hedge its business risk when it invests its members’ funds. This allows us to be as sure as we possibly can be that we will have the required funds when the members are to get them paid out. Generally speaking, we invest 80 per cent of our members’ funds via a so-called “hedging portfolio”. The remaining 20 per cent are invested into assets with higher risk profiles in order to ensure an inflation-adjusted value of the guaranteed pension.

ATP’s investment strategy means that members will always get the pensions that we have guaranteed - both when markets go up or down.

This is a major difference from how many other Danish pension companies operate, where the individual members take on risks with their savings without guarantees. ATP is a collective scheme where the members (virtually everyone in Denmark) cover each other, both in terms of returns and life expectancy.


ATP's pension product    |    ATP's investment strategy