Iceland’s pension property hit a brand new excessive on the finish of final yr – much more dramatic development in relative phrases, with pensions now double the Nordic nation’s annual gross home product (GDP), in keeping with 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 as a result of COVID pandemic -19.
“On the finish of the yr, provisional figures for complete retirement financial savings property confirmed simply over 6.0trn ISK, which is equal to double the nationwide product (GDP) in 2020,” mentioned authority.
On the finish of 2019, pension property represented 170% of GDP.
Though a small nation, the Icelandic pension system has lengthy been among the many richest on the earth relative to home GDP.
One of many primary components behind the relative enhance 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 as a result of results of the coronavirus pandemic, notably in export tourism, which contracted by 74, 4% throughout the yr.
Within the FSA’s combination pension property determine on the finish of 2020, he mentioned that the property of the mutual insurance coverage divisions of the pension funds amounted to ISK 5.12 billion and the financial savings of private pension managed by the fund amounted to ISK 595 billion.
Belongings with nationwide private retirement financial savings depositories stood at ISK 247 billion, he mentioned.
“The primary adjustments in asset lessons throughout the yr are that overseas forex property 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 share of foreign exchange in portfolio insurance coverage and personal property 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 as a result of giant 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, as a result of enhance in withdrawal authorizations throughout the yr.
Withdrawals from third pillar pension financial savings had been approved by the Icelandic parliament from April 2020 to January 2021, with sure restrictions, as a pandemic disaster measure.