Two of Denmark’s main pension providers are being investigated by the country’s fraud squad for suspected breaches of competition law related to a joint bid for the occupational pensions business of retailer Salling Group.

Danica Pension – the country’s second-largest commercial pension provider at DKK427bn (€57.2bn) – and the DKK275bn PKA made a joint offer to provide pension benefits to a potential new company customer earlier this year. IPE understands the client in question was Salling Group, Denmark’s biggest retailer.

In a statement published yesterday, Danica said that, following an internal review, it had found the offer did not comply with its own guidelines, because it probably violated Denmark’s Competition Act.

The firm then informed the Danish Competition and Consumer Authority (Konkurrence- og Forbrugerstyrelsen), and the case was handed over to the State Prosecutor for Serious Economic and International Crime (SØIK), also known as the fraud squad.

Danica Pension said it expected to be charged in relation to the case, but since it had informed the authorities itself, expected to avoid punishment.

Tomas Frydenberg, PKA’s director for members, said in a separate statement: “As soon as we became aware that the authorities were interested in the case, we ourselves made contact with the authorities and were completely open about the… co-operation with Danica.”

“If we have violated the competition rules, this was in no way a deliberate act… it was our opinion that it was perfectly legal to make a joint bid.”

Tomas Frydenberg, PKA

PKA said its main motive in entering into partnership with Danica for the bid had been that the link-up and possible addition of new members could benefit its existing members.

In the offer made to Salling Group – which changed its name from Dansk Supermarked earlier this year – PKA said it had only offered a contract to the pension scheme of HK, Denmark’s largest union for salaried employees, while Danica had offered a management pension scheme for the company.

PKA was unable to offer a pension scheme for management, it said, as it was necessary to be able to offer advanced bank-like products – something PKA did not have.

Frydenberg said: “Of course, we are very annoyed about this case. If we have violated the competition rules, this was in no way a deliberate act.

“On the contrary, from the outset, it was our opinion that it was perfectly legal to make a joint bid.”

Danica Pension chairman Jacob Aarup-Andersen said his firm wanted as much competition as possible in the pensions market.

“So it is highly regrettable that there has been insufficient attention paid to the competition law framework in the preparation of this specific offer,” he said.

He added that Danica Pension had tightened its internal procedures to ensure that the issue did not happen again.

IPE understands the problem came to light at Danica Pension during work undertaken in connection with its proposed takeover of the Danish activities of Sweden’s SEB Pension.

The competition authority and the SØIK made no public comment on the case.

PKA has been engaged in an effort to expand its business by winning private-sector pension contracts since 2016.

In April, the Danish Competition and Consumer Authority published new guidelines on how to assess joint bidding under competition law.

In the introduction to the English version of the guidelines, the authority states that as a general rule, consortium agreements in tenders for public and private contracts “will typically be legal if the parties to a consortium agreement are not competitors as regards the contract that the consortium is to carry out”.

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