Pension Reforms in Denmark

pension reform

From different points of view the Danish advantages structure is nothing exceptional differentiated and diverse systems in Europe. As different advantages systems into the EU countries as the competitor countries, it involves three levels, a central social development benefits, occupationally related supplementary annuities and private annuity speculation stores. Nevertheless, the weighting of these three segments is the thing that makes the Danish annuity structure unmistakable: amazing highlight is put on open position annuity for all subjects paying little regard to their past association with the work showcase. Starting late, the Danish annuity system has encountered different changes that have changed the constitution of the structure from just open to mostly private. This also shows a move in the conviction framework directing the advantages approach.

Pension system in Danish after WW2

Before we swing to the most recent progression we will rapidly clear up a part of the essential basic steps in the establishment of the Danish annuity structure. These preliminary arrangements are basic for a number of reasons. As an issue of first significance, they exhibit that however Denmark today is considered to have a place with the Scandinavian welfare organization with liberal, across the board focal points in perspective of individual rights this was definitely not at first components of the Danish welfare arranges. Additionally, as will be overseen later, different likenesses exist between the principal benefits arranges and the late surge of privatization that has portrayed the latest 20 years.

Reforms and Updates

In 2011, Denmark’s underlying retirement plan, Efterlon, qualified workers could leave five years sooner than the standard retirement age, however this will be lessened to three years .The early retirement age and advantages are requested so that a rising in future is trailed by an extension in the amount of years a laborer spends working Five more years will be added to the relentless climb in advantages and early retirement age.

In 2012, Denmark was conceded an audit situating by Mercer and transformed into the world’s underlying an evaluated benefits system. “Denmark’s remarkable an audit situating has been conceded in affirmation of the country’s particularly sponsored annuity structure, its irregular condition of points of interest and duties, the pension plan of attractive and a private advantages system with all around made bearings.

Voluntary’ occupational pension schemes

Despite there being no statutory need for additional word related annuity course of action, orchestrates that have been exhibited by total consensus, by the material chief affiliations and unions are compulsory for all associations secured by the simultaneous with simply limited quit openings. All around, the dedication rate indicates 15% of compensation with the business contributing 2/3 of that rate. The overwhelming part of these arrangements (more than 90%) are described responsibility (DC) arranges.


Workers matured somewhere around 16 and 67 are secured under the plan. All breadwinners in Denmark with over 9 hours of paid work every week pay ATP commitments to supplement the national plan. The ATP has a similar age prerequisites as the pension, hence one needs to resign at 65, and there is no base qualifying period. The business pays 66% of the ATP commitment, and the worker 33%. The sum paid depends exclusively on the quantity of hours worked. The top level input for a full-time worker in the private part relates to 1% of the profit of a normal full-time representative. Annuity benefits rely upon to what extent commitments were paid and represent a greatest of 41% of the state fundamental annuity. The benefits is paid out either as a singular amount if the adjust is little or as an annuity and is liable to tax assessment.

Annuity reserves

Just around 33% of deliberate word related plans in Denmark are supported utilizing a solitary organization annuity subsidize, by far most utilize vast benefits finance. The organization annuity reserve is assuming a regularly decreasing part. This mirrors the Danish mechanical structure with numerous little and medium-sized organizations making the business wide benefits subsidize more practical.

Group insurance plans

Pension plans are the most prominent type of financing for deliberate word related plans in Denmark, and also for the required ATP plans, with around 66% of intentional word related plans being subsidized by protection plans.

Public Pensions

The “folkepension” is comprehensive means-attempted basic advantages financed by general cost livelihoods and include three parts:

• Annual central entirety – is diminished just if work wage is gotten
• Pensioners supplement – work wage, capital pay and life accomplice pay reduced the supplement
• Supplementary annuity advantage – infers attempted

It is bolstered through a PAYG structure and evaluation financed from general spending earnings, where the central government compensates locale for their advantages employments. The authentic claim to get open annuity preferences is subject to particular conditions. The customary retirement age is in the blink of an eye 65 years yet will augmentation to 67 in the midst of the period 2024-2027 extensively year consistently. From 2025 onwards, the statutory retirement age will be recorded to future considering extending life expectancy.