Icelandic pension system now holds double annual GDP | Information

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Iceland’s pension belongings hit a brand new excessive on the finish of final yr – much more dramatic progress in relative phrases, with pensions now double the Nordic nation’s annual gross home product (GDP), based on new official figures.

The Icelandic FSA reported on Monday that retirement financial savings stood at ISK 6.05 billion (€ 39.6 billion) as of December 31, 2020, up from ISK 5.18 billion a yr earlier.

The FSA, which is a part of the nation’s central financial institution, mentioned: “Icelanders’ retirement financial savings elevated by ISK 773 billion in 2020, regardless of difficulties and uncertainty in monetary markets because of the COVID pandemic -19.

“On the finish of the yr, provisional figures for complete pension financial savings belongings confirmed simply over ISK 6.0 billion, which is double the nationwide product (GDP) in 2020” , mentioned the authority.

On the finish of 2019, pension belongings represented 170% of GDP.

Though a small nation, the Icelandic pension system has lengthy been among the many richest on the planet relative to home GDP.

One of many primary elements behind the relative improve in retirement financial savings in 2020 is that Iceland’s GDP contracted in 2020 by 6.6% in actual phrases, after struggling a decline. 5.1% in actual phrases within the fourth quarter.

Statistics Iceland mentioned final week in its annual GDP announcement that the contraction within the economic system was largely because of the results of the coronavirus pandemic, significantly in export tourism, which contracted by 74, 4% throughout the yr.

Within the FSA’s combination pension belongings determine on the finish of 2020, he mentioned that the belongings of the mutual insurance coverage divisions of the pension funds amounted to ISK 5.12 billion and the financial savings of non-public pension managed by the fund amounted to ISK 595 billion.

Property with nationwide private retirement financial savings depositories stood at ISK 247 billion, he mentioned.

“The principle adjustments in asset lessons throughout the yr are that international foreign money belongings elevated by ISK 426 billion, or about 25%, or simply over half of the rise in retirement financial savings throughout the yr, ”the FSA mentioned.

The proportion of international foreign money in portfolio insurance coverage and personal belongings was round 35%, or round ISK 2.10 billion. on the finish of 2020, he mentioned.

Amongst different adjustments within the asset mixture of pension suppliers over the yr, the FSA reported that coated bond weights had elevated considerably, as did shares and company bonds, however that loans from coated bonds had elevated considerably. fund members had declined.

The latter change was primarily because of the massive repayments that had been made throughout the yr, the supervisory authority mentioned.

The FSA mentioned the rise in private pension holdings slowed considerably in 2020, because of the improve in withdrawal authorizations throughout the yr.

Withdrawals from third pillar pension financial savings had been licensed by the Icelandic parliament from April 2020 to January 2021, with sure restrictions, as a pandemic disaster measure.

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