Outstanding Industry Contribution 2012

Lars Rohde

The Perfect Swansong

What better way to end your career at one the world’s leading pension funds than to be honoured by your peers for your outstanding contribution to the industry? That is exactly what has happened in 2012 to Lars Rohde, soon to step down as chief executive officer of the highly influential and innovative Danish first pillar supplementary giant ATP. It was the perfect ending to this part of his career and underlines the acknowledgement by Europe’s pension fund industry of the groundbreaking concepts ATP brought to the fore under his guidance.
As Rohde prepared to take up his new role next February as governor of Danmarks Nationalbank, the Danish central bank, it is with pleasure and gratitude that IPE’s readers bestowed this award on him. We take a look back at how he came to make such a significant contribution to Europe’s pensions.

Rohde’s new office at the central bank will see him come full circle in many ways, for it was there that he first worked as an economist after graduating from Aarhus University with a masters’ in economics in the early 1980s. His first post at a pension scheme came in 1985, when he joined the Doctors Pension Fund as head of asset management. After becoming the fund’s chief executive, he moved on in 1989 to head of funding and asset management at Realkredit Danmark, a leading Danish mortgage bank. He became deputy chief executive officer in 1997 before joining ATP in 1998 as CEO.
ATP itself states it earned its present international status and reputation during Rohde’s term in office. And it has not always been plain sailing. Rohde successfully led ATP through a decade characterised by fundamental changes to pensions regulations, a series of persistent and ongoing financial crises and highly unstable market conditions. The foundation for this success is not so much ATP’s attractive results, but rather the fact it has delivered these results from a cleverly crafted business model, well-drafted strategies and highly effective execution.
Perhaps the best way to gauge and appreciate the significance of Rohde’s role in guiding ATP and redesigning its business model is to list its key achievements, all of which have had an influence way beyond ATP’s offices and Denmark, during his term in office:
  • 􏰀The adoption of a new integrated view of pension management; 􏰀
  • The definition of liability hedging as a new business area; 􏰀
  • The development of a systematic approach to risk management, including the redesign of ATP’s investment strategies to enable the application of a risk-based approach; 􏰀
  • The conception of strategies to hedge tail risk; 􏰀
  • The development and implementation of a new pension guarantee-based accrual model; and 􏰀
  • The development and implementation of new models capturing and addressing longevity risk.
Rohde, more than anyone else, can take personal credit for the success of the many changes and innovations ATP has instigated in the past 15 years or so. This extends to his multi-faceted role as manager, leader, team builder, intellectual and an innovative, open and, perhaps above all, curious mind with the capacity to span the many different aspects of pensions management, systems design and policy.
ATP’s recent innovative concept for managing longevity risk is a fine example of Rohde’s commitment and very much formed the basis of its multiple wins at the IPE Awards in 2011, including Best European Pension Fund, a title it has won numerous times over the years.
Known as SAINT, ATP’s longevity risk management model was inspired by the €5bn or so that longevity – people living longer – added to ATP’s liabilities from 2002-2012. It is not so much the fact that people are living longer but the difficulty in predicting for how long. SAINT selects a reference population with long-term mortality and longevity prospects that closely reflect those of the actual population of interest, which, in ATP’s case, is the Danish public.
The model is a natural extension of ATP’s business model which is based on an inherent low level of risk tolerance and it therefore plays a significant role in the management of the scheme’s dedicated liability-defeasing hedge portfolio. The result? It successfully reduced ATP’s provisions for longevity by a huge 93% from €480m to €33m in 2011.
Rohde’s achievements in pension management are in a league of their own but he always looks ahead to the next challenge. As such he takes a holistic view of what constitutes a successful pension scheme. For Rohde, occupational pensions are just one of several building blocks in multi-pillar social structures. A well-designed pension scheme will and should do much more than merely fulfil its own objectives. It should perform a well-defined role in the overall fabric of society and national policy.
Hence, in his pursuit of excellence in the development of pension scheme management, Rohde was a member of the Danish Committee on Corporate Governance between 2003 and 2011. In 2009, he joined the government’s Danish Forum on Growth and is a member of the board of Aarhus University.
But Rohde is not confined by national borders. His extensive contributions and insights have earned him a reputation beyond Denmark. Among other positions, he acted as an adviser during the recent Swedish government inquiry into the future of its sophisticated set of buffer funds, the inter- nationally renowned AP funds, and he has been an important contributor to the current UK debate on the implementation of workplace pensions, having spearheaded the launch of NOW: Pensions in the UK.
IPE is confident Rohde will continue to be an exemplary leader and innovator at the central bank of Denmark and we would like to thank him for his hard work, relentless drive and dedication in helping elevate Europe’s pension industry to the innovative, dynamic and globally leading socially integrated sector it is today.
Judge's comment:
"Rohde, more than anyone else, can take personal credit for the success of the many changes and innovations ATP has instigated in the past 15 years or so. This extends to his multi-faceted role as manager, leader, team builder, intellectual and an innovative, open and, perhaps above all, curious mind"
  • Governor of Danish central bank
  • ​Former chief executive officer of ATP
  • Oversaw redesign of ATP business model
  • Led Danish committee on corporate governance