Faroese pension funds fail to manage savings

The Faroese trade union movement has admitted it cannot manage pension savings effectively, according to Kim Hansen, who has long been involved in the islands’ pension system.

Speaking to Faroese public broadcaster KVF, Hansen said poor returns were nothing new in the Faroes, and that the unions’ control over the funds explained their underperformance.

“When we in the Faroes have tried and failed, it’s natural to consider whether we should instead rely on the four or five best pension providers in Denmark and Norway, since they perform far better,” Hansen said. “We import cars, we don’t make rubber boots in the Faroes—why not let others handle our pensions?”

He argued the real issue was a lack of competition, calling it a “societal task” to create a proper market. Currently, all citizens receive basic state pensions, with optional supplementary private schemes requiring medical underwriting.

“The most important thing is where we place our money. Where do you borrow for a house? Where the interest is lowest. Where do you put your pension? Where the return is highest,” Hansen said.