Contribution groups

The pension schemes are placed in different groups. An interest rate group, a cost group and a risk group. The groups ensure a fair allocation of return and profit between the pension schemes.

The schemes are placed in the groups depending on their terms and conditions so that schemes in the same group have the same profile. The terms and conditions of the pension scheme determine the group in which it is placed, and it is not possible to move the scheme to another group without changing the prerequisites.

You can see the interest rate, cost and risk groups of your pension scheme in Netpension.


Interest rate groups

There are four interest rate groups, and the schemes are placed in the different groups according to the guaranteed interest rate used to calculate the guaranteed minimum benefit. This guaranteed interest rate typically depends on when the pension scheme was established.

For old schemes, we have a guaranteed benefit on retirement which is based on a high interest rate, and for new schemes, we have a guaranteed minimum benefit which is based on a lower interest rate.

Therefore, the old schemes have to be invested more prudently than the new schemes. In the long-term perspective, this means that the old pension schemes will have a lower rate of interest on policyholders' savings than the new pension schemes where the savings can be invested more freely. When we invest more freely, we might be able to achieve a higher return in the long term.

 

Interest rate group 0*

*At 1 July 2017, interest rate groups 0 and 1 were combined. If your interest group is specified as
interest rate group 0 in Netpension, this is equal to interest rate group 1.

See the current rate of interest on policyholders' savings

Interest rate group 1

Interest rate group 1 includes pension schemes with a guaranteed benefit on retirement which is based on low guaranteed interest rates. This mainly concerns pension schemes established after 1 July 1999.

Those schemes have a guaranteed interest rate between 1.0 and 2.0. The guaranteed interest rate is one of the conditions forming the basis of the guaranteed benefit on retirement.

Due to the low guaranteed interest rates, interest rate group 1 allows us to invest somewhat more freely than the other interest rate groups. This allows for a slightly higher return in the long term and thus a higher rate of interest on policyholders' savings. As a result, we can invest a certain proportion in investment assets with a high return potential such as shares and alternative investments.

 

See the current rate of interest on policyholders' savings

Interest rate group 2

Interest rate group 2 includes pension schemes with a slightly higher guaranteed benefit on retirement which is based on a slightly higher guaranteed interest rate. The schemes have an average guaranteed interest rate of more than 2.0 per cent and up to 3.0 per cent. The guaranteed interest rate is one of the conditions forming the basis of the guaranteed benefit on retirement.

Interest rate group 2 allows us to invest slightly more freely than interest rate groups 3 and 4. This allows for a slightly higher return in and thus a higher rate of interest on policyholders' savings. As a result, we can invest a certain proportion in investment assets with a high return potential such as shares and alternative investments.

 

See the current rate of interest on policyholders' savings

Interest rate group 3

Interest rate group 3 includes pension schemes with a high guaranteed benefit on retirement which is based on a higher guaranteed interest rate. The schemes have an average guaranteed interest rate of more than 3.0 per cent and up to 4.0 per cent. The guaranteed interest rate is one of the conditions forming the basis of the guaranteed benefit on retirement.

In interest rate group 3, we have to invest more prudently than in interest rate groups 1 and 2 to ensure the guaranteed benefit on retirement. This means that we can only invest a small proportion of the savings in investment assets with a high return potential such as shares and alternative investments. Secure investments in the form of bonds and real estate thus account for most of the investments.

 

See the current rate of interest on policyholders' savings

Interest rate group 4

Interest rate group 4 includes pension schemes with the highest guaranteed benefit on retirement which is based on the highest guaranteed interest rate. The schemes have a guaranteed interest rate of more than 4.0 per cent. The guaranteed interest rate is one of the conditions forming the basis of the guaranteed benefit on retirement.

In interest rate group 4, we have to invest very prudently to ensure the guaranteed benefit on retirement. Therefore, we have only to a very limited extent invested in shares and alternative investments. Most of the savings are invested in secure investments, such as bonds and real estate.

 

See the current rate of interest on policyholders' savings

Risk groups

There are two risk groups:

  1. company pension schemes
  2. individual pension schemes and pension schemes under which benefits are currently being paid

Once a year, we calculate the individual risk groups and the results are adjusted in Velliv's equity.

Cost groups

There are two cost groups:

  1. company pension schemes
  2. individual pension schemes

Once a year, we calculate the individual cost groups and the results are adjusted in Velliv's equity.

Can the contribution group for the pension scheme be changed?

You cannot move a pension scheme from one interest rate group, risk group or cost group to another yourself. But the placing of the pension scheme may still change over time.

Every year on 1 January, the pension scheme is placed again in the contribution groups to which it now belongs.

Change of interest rate group

If you have had your pension scheme for many years, the savings may have different guaranteed interest rates depending on the terms and conditions in force when the contributions were made.

When a pension scheme has several guaranteed interest rates, an average guaranteed interest rate will be calculated, and the pension scheme will be placed in the corresponding interest rate group.

If you have contributed a large amount in the past year, this amount may be subject to a lower guaranteed interest than the amount contributed when the scheme was established. This means that the average guaranteed interest rate will change. And as a result, the pension scheme can be moved to a lower interest rate group.

New and changed contribution groups

It is a requirement that the pension schemes in a contribution group have uniform terms and conditions. If this is no longer the case, or if pension schemes are established which do not match the existing contribution groups, Velliv will change the contribution groups and may create new ones. Then all pension schemes will be placed in the relevant groups.

This way, the interest rate group, risk group and cost group of the pension scheme may change to ensure on an ongoing basis that the pension scheme is placed in contribution groups with corresponding schemes.