Denmark’s biggest commercial pension fund PFA has reported strong business growth in the year so far, with contributions up 14% from last year even though the company said it had been very selective regarding new sales.

Henrik Heideby, chief executive at PFA, said: “PFA’s high level of growth in customer contributions continued in the third quarter.”

In the first nine months of 2013, contributions rose 14% to DKK19.4bn (€2.6bn) from DKK17bn in the same period last year, the company said in its interim report.

PFA said the growth in contributions reflected the fact more and more companies were choosing it as a pensions provider.

It said it expanded its position as market leader in a saturated market, and that customer retention had been more effective than in 2012.

“In relation to new sales, PFA is being very selective and has refused or withdrawn from several pension tenders where the tender documents did not allow for value-creation and securing profitable customer relationships,” it said.

Heideby said 2013 was a very good investment year for customers with savings in the unit-link product PFA Plus.

The return on unit-linked products slipped to 5.2% before pensions tax (PAL) from 7.8% the year earlier, while with-profits pensions made an investment loss of 2% compared with a profit of 8.3% over the same period last year.

Contributions to PFA Plus increased by 48% year-on-year before internal transfers and, at the end of September, represented 66% of the total contributions.

PFA said it was the only pensions provider to offer all customers with guaranteed pension products a share of the reserves if they switched to the unit-link product.

As a mutually owned company, PFA puts aside around 5% of customers’ savings as capital, or KundeKapital, on which customers receive an annual return.

PFA said the transfer allowance was calculated according to regulations and in close dialogue with the FSA to make sure it was reasonable both for customers leaving the guaranteed product and for those remaining with it.

Total assets under management rose to DKK373bn from DKK351bn, and solvency coverage rose to 225% from 205%.

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