Order on Financial Reports for the Labour Market Supplementary Pension

Order on Financial Reports for the Labour Market Supplementary Pension

Pursuant to Sections 25 m and 32 a, paragraph 2, of the Act on the Labour Market Supplementary Pension, cf. Act Consolidation No. 1110 of 10 October 2014, as amended by Act No. 1538 of 12 December 2023, the following is enacted:

Chapter 1 Scope of Application

Section 1. This Order applies to the Labour Market Supplementary Pension (hereinafter referred to as ATP).

Section 2. For each financial year, ATP shall prepare and publish an annual report and a half-yearly report. The annual and half-yearly reports shall include a consolidated financial statement, cf. Section 27.

Paragraph 2. Sections 25 a, 25 b, 25 h, 25 j, 25 k and 25 l of the Act on the Labour Market Supplementary Pension shall not apply to the half-yearly report and any quarterly reports.

Paragraph 3. The annual report shall be published no later than 4 months after the end of the financial year.

Section 3. A financial statement that ATP prepares exclusively for its own use is not an annual report or a half-yearly report under this Order. If ATP prepares a financial statement that is not an annual report or a half-yearly report under this Order, it must not be designated as an annual report or half-yearly report. The financial statement must furthermore, in form and content, appear in such a way that it cannot be confused with an annual report or half-yearly report submitted under this Order.

Chapter 2 General Provisions

Section 4. The annual and half-yearly reports, including the consolidated financial statement, shall be prepared in accordance with international accounting standards approved pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, with the necessary adjustments as required by the legal framework for ATP.

Paragraph 2. The following options in the international accounting standards covered by paragraph 1 must not be used:

1. The cost model for measuring investments in subsidiaries, associates and jointly controlled entities (IAS 27).
2. The cost model for measuring investment property (IAS 40).

Paragraph 3. Financial instruments shall be measured at fair value through profit or loss in all cases where the circumstances allow for the option to measure at fair value through profit or loss (IFRS 9).

Chapter 3 Provisions on Specific Items in the Balance Sheet

Section 5. The asset side of the balance sheet in the annual financial statement shall include an item named "Investment assets linked to annuities with market exposure". The item shall list the investment assets linked to the stock of annuities with market exposure pursuant to Section 6, paragraph 2.

Paragraph 2. The assets, cf. paragraph 1, shall be specified by type in the balance sheet or in a separate part of the annual report that is clearly delimited and named "notes". The connection of the assets to the stock of annuities with market exposure pursuant to Section 6, paragraph 2, shall be specified in a note.

Section 6. The liability side of the balance sheet in the annual financial statement shall include an item named "Guaranteed benefits", which shall be calculated in accordance with the actuarial basis that ATP has notified to the Danish Financial Supervisory Authority.

Paragraph 2. The liability side of the balance sheet in the annual financial statement shall include an item named "Annuity with market exposure", which shall be calculated in accordance with the actuarial basis that ATP has notified to the Danish Financial Supervisory Authority.

Paragraph 3. The liability side of the balance sheet in the annual financial statement shall include an item named "Risk adjustment", which shall be calculated in accordance with the actuarial basis that ATP has notified to the Danish Financial Supervisory Authority.

Section 7. The liability side of the balance sheet in the annual financial statement shall include an item named "Undistributed funds", which shall be calculated at the amount corresponding to the accounting value of the total assets minus the items in Section 6 and the sum of the accounting value of other liabilities.

Paragraph 2. The item in paragraph 1 shall include the item "Long-term supplementary provision", which shall be calculated in accordance with the actuarial basis that ATP has notified to the Danish Financial Supervisory Authority.

Paragraph 3. The item in paragraph 1 shall include the item "Bonus potential", which shall be calculated at the amount corresponding to the accounting value of the total assets minus the items in Section 6, the item in paragraph 2 and the sum of the accounting value of other liabilities.

Chapter 4 Information

General

Section 8. In addition to the information required in the international accounting standards covered by Section 4, paragraph 1, supplementary information as set out in this chapter shall be provided in the annual financial statement.

Paragraph 2. Unless otherwise stated, the provisions of this chapter apply to the annual report and the consolidated financial statement.

Paragraph 3. The information to be provided pursuant to this chapter shall be contained in a separate part of the annual report that is clearly delimited and named "notes". If the information is provided by referring to the management report or other parts of the annual report that do not form part of the annual financial statement, the reference must be precise and delimit the relevant information in relation to other information not covered by the disclosure requirements under this chapter.

Paragraph 4. ATP shall ensure that the information to be provided pursuant to this chapter is covered by audit, cf. Section 25 k of the Act on the Labour Market Supplementary Pension.

Five-Year Overview

Section 9. The annual financial statement shall include a five-year overview, which shall at a minimum contain the main and key figures established in Annex 3.

Paragraph 2. If the figures in the five-year overview are not comparable, the figures shall be adjusted as far as possible. Lack of comparability or adjustments made shall be stated and justified.

Paragraph 3. Paragraphs 1 and 2 do not apply to the consolidated financial statement.

The Balance Sheet

Section 10. The assets and their returns shall be specified in accordance with the table in Annex 1, cf. the rules for completing the table in Annex 2. The specification shall be made separately for assets linked to annuities with market exposure and for the total assets linked to guaranteed benefits, long-term supplementary provision, risk adjustment and bonus potential.

Paragraph 2. Paragraph 1 does not apply to the consolidated financial statement.

Paragraph 3. The information pursuant to paragraph 1 is not subject to a requirement for comparative figures.

Section 11. If the annual report does not contain a list of all companies in which capital shares are held, as well as the size of these capital shares, it shall be stated whether the public has access to this information upon request or in other ways.

Section 12. The development of each of the items in Sections 6 and 7 shall be specified by stating the opening value, relevant elements of the year's movements, and the closing value.

Section 13. Any differences between the guaranteed benefits pursuant to Section 6, paragraph 1, in the annual and half-yearly reports and the guaranteed benefits calculated with discount rates in accordance with the relevant risk-free interest rate curve including volatility adjustment, published by EIOPA pursuant to Article 77 e, paragraph 1, of Directive 2009/138/EC of the European Parliament and of the Council, shall be disclosed and explained, and the information shall include a comparison of the interest rate curves.

Paragraph 2. Any differences between the guaranteed benefits, pursuant to Section 6, paragraph 1, in the annual or half-yearly reports respectively, and the guaranteed benefits calculated without the addition of illiquidity premiums, shall be disclosed and explained, and the information shall include a comparison of the interest rate curves.

Paragraph 3. Paragraphs 1 and 2 do not apply to the consolidated financial statement.

The Income Statement

Section 14. The benefits paid out by ATP shall be specified in the following items:

1. Own pension (current).
2. Spouse's pension (current).
3. Own pension (lump sum).
4. Spouse's benefit (lump sum).
5. Child's benefit (lump sum).
6. Death benefit payments (lump sum).

Section 15. The total remuneration for the financial year to the audit firm performing the statutory audit, and to the audit firm's subsidiaries, shall be disclosed. The information shall be specified into remuneration for the statutory audit of the annual financial statement, remuneration for other assurance engagements, remuneration for tax advice and remuneration for other services.

Paragraph 2. The amounts mentioned in paragraph 1 shall be disclosed correspondingly for the preceding financial year.

Section 16. The rules applied for the distribution of the realized result to ATP's members and other entitled parties, cf. Section 18 of the Act on the Labour Market Supplementary Pension, shall be described. In this context, the size of the realized result for the financial year and the distribution of the amount shall be stated.

Paragraph 2. The bonus potential shall be divided in a note into the part that, according to ATP's principles for bonus allocation, could be used to increase the guaranteed benefits and annuities with market exposure, and the part that, according to the principles, must be retained as undistributed bonus. The principles underlying the determination of bonus allocation, taking into account the funds available, shall be discussed in a note.

Section 17. The average number of full-time employees in the financial year shall be disclosed. Personnel expenses shall be disclosed and specified into salary, pension, other social security costs and taxes calculated on the basis of the number of employees or payroll.

Chapter 5 Management Report

Section 18. The management report shall:

1. describe ATP's main activities,
2. describe uncertainties in recognition and measurement, as far as possible with amounts specified,
3. describe unusual circumstances that may have affected recognition or measurement, as far as possible with amounts specified,
4. account for the development of ATP's activities and economic conditions,
5. mention significant events that have occurred after the end of the financial year,
6. describe ATP's expected development, including special assumptions and uncertain factors that management has based the description on,
7. describe ATP's knowledge resources, if they are of particular significance for future earnings,
8. describe the specific risks, including business and financial risks, that may affect ATP, and
9. describe the group's legal, managerial and organizational structure, including group companies. The description may be replaced by a reference to where such an updated description is available, for example on ATP's website.

Section 19. The management report shall describe the development in the financial year compared with the expected development according to the most recently published annual report, or according to the most recently published expectations during the year, and justify deviations therefrom.

Section 20. The management report shall include a mention of any bonus allocated to ATP's members.

Section 21. The management report shall contain information about the board and executive positions held by board and executive members in other commercial enterprises, except for board positions in ATP's own 100% owned subsidiaries. If a board or executive member is a member of the management of another parent company and one or more of its 100% owned subsidiaries, it is sufficient to disclose the name of the parent company and the number of its subsidiaries in which the person is a management member.

Section 22. ATP shall include a statement on corporate governance, which shall include the following:

1. Information on whether ATP is covered by a code of conduct for corporate governance, with reference to the code, if applicable.
2. Indication of where the code mentioned in item 1 is publicly available.
3. Indication of which parts of the code mentioned in item 1 ATP deviates from, and the reasons therefor, if ATP has decided to deviate from parts of the code.
4. Indication of the reasons why ATP does not use the code mentioned in item 1, if ATP has decided not to use the code.
5. Reference to any other codes of conduct for corporate governance that ATP has decided to use in addition to or instead of the code mentioned in item 1, or that ATP voluntarily uses, with disclosure of corresponding information as stated in items 2 and 3.
6. Description of the main elements of ATP's internal control and risk management systems in connection with the financial reporting process.
7. Description of the composition of ATP's management bodies and their committees and their functions.

Paragraph 2. ATP may omit the statement pursuant to paragraph 1 from the management report if the management report contains a reference to ATP's website where the statement has been published. Publication on ATP's website shall be in accordance with the requirements in the Order of the Danish Business Authority on the publication of certain statements pursuant to the Financial Statements Act with the necessary adjustments.

Section 23. The management report shall be supplemented with a non-financial statement on corporate social responsibility. The statement shall contain information on environmental matters, including ATP's work to reduce the climate impact of ATP's activities, social matters, personnel matters and matters concerning respect for human rights, combating corruption and bribery. The information shall ensure an understanding of ATP's development, result and situation and the impact of ATP's activities on the matters in the second sentence. The statement shall be given in the management report, cf. however paragraph 5.

Paragraph 2. The statement shall contain information on ATP's policies for corporate social responsibility for the matters mentioned in paragraph 1, including any standards, guidelines or principles for corporate social responsibility that ATP uses. If ATP has chosen not to have a policy for one or more of the matters mentioned in paragraph 1, the statement shall contain a clear and justified explanation thereof. For each matter where ATP has a policy, the following shall be disclosed:

1. The content of ATP's policies for corporate social responsibility.
2. How ATP translates its policies for corporate social responsibility into action, including any systems or procedures therefor.
3. Due diligence processes, if ATP uses such processes.
4. ATP's assessment of the results achieved as a result of ATP's work with corporate social responsibility in the financial year, and ATP's expectations for the work going forward.

Paragraph 3. The statement shall, regardless of whether ATP has policies for the matters mentioned in paragraph 1, contain the following:

1. A short and precise description of ATP's business model.
2. Information on the most significant risks associated with the matters mentioned in paragraph 1 in relation to ATP's business activities, including, where relevant and proportionate, in relation to ATP's business relationships, products or services, which involve a special risk of negative impacts on the matters mentioned in paragraph 1. Information shall be given on how ATP handles the relevant risks.
3. Information on non-financial key performance indicators relevant for specific business activities.
4. Where relevant, references to and further explanation of amounts reported in the financial part of the statement.

Paragraph 4. ATP may in special cases omit to provide information pursuant to paragraphs 2 and 3 if the publication of the relevant information is expected to cause significant damage to ATP in connection with ongoing negotiations or legal disputes. If ATP omits to provide information, cf. first sentence, this must not prevent the statement from giving a fair and balanced understanding of ATP's development, result and situation and the impact of ATP's activities on the matters mentioned in paragraph 1. If the exception in the first sentence is used, ATP shall in its statement on corporate social responsibility disclose that ATP has used this exception.

Paragraph 5. ATP may choose to provide the statement:

1. in a supplementary report in the annual report, cf. Section 25 h of the Act on the Labour Market Supplementary Pension, to which reference is made in the management report, or
2. on ATP's website, to which reference is made in the management report.

Paragraph 6. Publication of the statement pursuant to paragraph 5, item 1 or 2, shall be in accordance with the requirements in the Order of the Danish Business Authority on the publication of certain statements pursuant to the Financial Statements Act with the necessary adjustments.

Paragraph 7. The information pursuant to paragraphs 1-4 shall be given for the ATP group as a whole. A subsidiary included in the group may omit to include the information in its management report.

Paragraph 8. ATP may omit to prepare a statement on corporate social responsibility pursuant to paragraphs 1-4 if ATP discloses its policies for corporate social responsibility according to international guidelines or standards that contain the disclosure requirements mentioned in paragraphs 1-4. Paragraph 2, second sentence, applies correspondingly if the statement prepared according to international guidelines or standards does not cover the matters mentioned in paragraph 1.

Section 24. ATP shall account for the status of the fulfillment of set targets for the underrepresented gender in the board, including why ATP has not achieved the set objective, if applicable, cf. however paragraph 3.

Paragraph 2. ATP shall account for the policy to increase the share of the underrepresented gender in ATP's other management levels, cf. however paragraph 4.

Paragraph 3. If there is no underrepresentation of one gender in the board, it is sufficient to disclose this in the management report.

Paragraph 4. If there is no underrepresentation of one gender in the company's other management levels, it is sufficient to disclose this in the management report.

Paragraph 5. For statements pursuant to paragraphs 1-4, Section 23, paragraphs 5-7, apply correspondingly.

Section 25. If ATP has a diversity policy, ATP shall supplement the management report with a statement thereon.

Paragraph 2. The statement shall include a description of ATP's diversity policy used in connection with the composition of ATP's management, regarding e.g. age, gender or educational and professional background. The statement shall contain information on:

1. the objectives of the diversity policy,
2. how the diversity policy has been implemented, and
3. the results of the diversity policy in the reporting period.

Paragraph 3. If ATP does not have a diversity policy, the management report shall contain a statement with an explanation of the background therefor.

Paragraph 4. The information pursuant to paragraphs 1-2 shall be given for the ATP group as a whole. A subsidiary included in the group may omit to include the information in its management report.

Paragraph 5. For statements pursuant to paragraphs 1-4, Section 22, paragraph 2, applies correspondingly.

Section 26. If ATP has a data ethics policy, ATP shall supplement the management report with a statement thereon.

Paragraph 2. The statement shall contain information on the policy and ATP's work with data ethical issues. If ATP does not have a data ethics policy, the management report shall contain a statement with an explanation of the background therefor.

Paragraph 3. It is sufficient that the information pursuant to paragraph 1 is given for the group as a whole. A subsidiary included in the group may omit to include the information in its management report. If the exception in the first sentence is used, the subsidiary shall disclose this, including which parent company has included the statement, and where it has been published.

Paragraph 4. For the statement pursuant to paragraph 1, Section 22, paragraph 2, applies correspondingly.

Chapter 6 Consolidated Financial Statement and Half-Yearly Report

Section 27. The consolidated financial statement, cf. Section 2, shall cover ATP and its subsidiaries.

Section 28. The half-yearly report, cf. Section 2, shall include an income statement and a statement of other comprehensive income or a total comprehensive income statement for the period 1 January to 30 June with comparative figures from the corresponding half-year period of the previous year, as well as a balance sheet as of 30 June with comparative figures from the balance sheet at the end of the previous year.

Paragraph 2. If the half-yearly report has been audited, the auditor's report shall be reproduced in full in the report. The same applies if there is a reviewer's report from the auditor. If the half-yearly report has not been subject to audit or review, this shall be stated in the report.

Paragraph 3. The half-yearly report shall include a management certification that meets the requirements in Section 25 c of the Act on the Labour Market Supplementary Pension.

Paragraph 4. The half-yearly report shall be submitted to the Danish Financial Supervisory Authority and to the Ministry of Employment no later than 3 months after the end of the half-year. The half-yearly report shall be published no later than the same date.

Chapter 7 Penalty Provisions and Entry into Force and Transitional Provisions

Section 29. A fine shall be imposed on anyone who violates Section 2, paragraphs 1 and 3, Section 3, second and third sentences, Sections 4-7, Section 8, paragraphs 1, 3 and 4, Section 9, paragraphs 1 and 2, Section 10, paragraph 1, Sections 11-12, Section 13, paragraphs 1 and 2, Sections 14-20, Section 21, first sentence, Section 22, Section 23, paragraphs 1-4, paragraph 6, paragraph 7, first sentence, and paragraph 8, first sentence, Section 24, paragraphs 1 and 2, Section 24, paragraph 5, cf. Section 23, paragraph 5, first sentence, paragraph 6 and paragraph 7, first sentence, Section 25, paragraphs 1-3, Section 25, paragraph 5, cf. Section 22, paragraph 2, Section 26, paragraphs 1 and 2 and paragraph 3, third sentence, Section 26, paragraph 4, cf. Section 22, paragraph 2, and Sections 27 and 28.

Paragraph 2. Companies etc. (legal persons) may be subject to criminal liability according to the rules in Chapter 5 of the Criminal Code.

Section 30. This Order enters into force on 1 January 2024.

Paragraph 2. The Order applies to annual and half-yearly reports submitted for financial periods beginning on 1 January 2024.

Paragraph 3. The Order may be applied to annual and half-yearly reports submitted for financial periods beginning on 1 January 2023.

Paragraph 4. Order No. 771 of 31 May 2022 on financial reports for the Labour Market Supplementary Pension is repealed.

The Danish Financial Supervisory Authority, 12 December 2023 Louise Mogensen / Birgitta Nielsen

Annex 1 Specification of assets and their returns, cf. Section 10

The specification shall be made separately for: – Assets linked to annuities with market exposure – The total assets linked to guaranteed benefits, long-term supplementary provision, risk adjustment and bonus potential

Opening Closing Return in % p.a. before tax

1. Land and buildings 2.1 Quoted equity shares 2.2 Unquoted equity shares
2. Total equity shares 3.1 Government and mortgage bonds 3.2 Index bonds 3.3 Corporate bonds and emerging market bonds 3.4 Loans etc.
3. Total bonds and loans
4. Subsidiaries
5. Other investment assets
6. Derivative financial instruments for hedging net changes in assets and liabilities

Annex 2 Completion of the table on specification of assets and their returns, cf. Section 10

1. Lines in the table that only contain insignificant amounts may be aggregated with other lines.
2. In the columns Opening and Closing, the total value of the relevant asset group is stated respectively at the beginning and at the end of the financial year.
3. In the column "Return in % p.a. before tax", the total time-weighted return in percent with one decimal achieved by the relevant asset group during the financial period is stated. The time-weighted return is calculated in principle by the following formula:

rT is the total time-weighted return for the period, and rt is the returns in sub-periods, which are delimited each time a payment is made to or from the portfolio. The time-weighted return can be approximated from the return in fixed sub-periods, e.g. return per month or a shorter period. The method used shall be disclosed in connection with the table.

4. The return that enters into the calculation of the return percentage includes both investment income recognized in the income statement and relevant income recognized...