Occupational Pensions

Arbejdsmarkedspensioner

Coverage

Mandatory insurance

All public sector workers (excluding civil servants) are enrolled in a collectively agreed fully funded defined contribution scheme.
Private sector workers are enrolled, if specified in collective agreement.

Opting in

The self-employed are not mandatorily enrolled, but can opt in if they meet the qualifying conditions for the specific pension fund.
Employees can request to continue payments on an individual basis after leaving the company.¹

Financing

General finances

Fully funded personal pension plans based on contribution payments.

Contribution payments

Contribution rates are bound by collective agreements and are similar for all workers under the agreement.
Contributions are shared between the employer (2/3) and the employee (1/3).
Currently, contribution rates range between 12% and 18% of the salary.

Taxation of contribution payments

Employees will receive full tax relief on their contributions if pension plans guarantee lifelong payments.
Tax reliefs are received for contributions up to DKK 57,200 (in 2020) for annuities.

Administration

Dependent on pension plan; examples are: PensionDanmark, Industriens Pension, PenSam, PFA, P+, SAMPENSION.
The Danish Financial Supervisory Authority (Finanstilsynet) supervises providers who administer pension plans.

Qualifying Conditions

Dependent on pension plan.

Benefits

Pension benefits/payments

Pensions are typically paid as annuity, instalment, old age insurance (Aldersforsikring)/old age savings (Aldersopsparing), or capital pension (deposit is no longer possible as it has been replaced by old age insurance/savings).
Benefits are mostly defined contribution based.
Occupational pension schemes will often cover a variety of social risks and provide a range of benefits, including old age benefits, disability benefits, survivors’ benefits, child benefits and critical illness benefits.

Taxation and social security contributions

Dependent on pension plan.
Pension payments are not subject to social security contributions.

Coverage

Financing

Administration

Qualifying Conditions

Benefits

Mandatory insurance

All public sector workers (excluding civil servants) are enrolled in a collectively agreed fully funded defined contribution scheme.
Private sector workers are enrolled, if specified in collective agreement.

Opting in

The self-employed are not mandatorily enrolled, but can opt in if they meet the qualifying conditions for the specific pension fund.
Employees can request to continue payments on an individual basis after leaving the company.¹

General finances

Fully funded personal pension plans based on contribution payments.

Contribution payments

Contribution rates are bound by collective agreements and are similar for all workers under the agreement.
Contributions are shared between the employer (2/3) and the employee (1/3).
Currently, contribution rates range between 12% and 18% of the salary.

Taxation of contribution payments

Employees will receive full tax relief on their contributions if pension plans guarantee lifelong payments.
Tax reliefs are received for contributions up to DKK 57,200 (in 2020) for annuities.

Dependent on pension plan; examples are: PensionDanmark, Industriens Pension, PenSam, PFA, P+, SAMPENSION.
The Danish Financial Supervisory Authority (Finanstilsynet) supervises providers who administer pension plans.

Dependent on pension plan.

Pension benefits/payments

Pensions are typically paid as annuity, instalment, old age insurance (Aldersforsikring)/old age savings (Aldersopsparing), or capital pension (deposit is no longer possible as it has been replaced by old age insurance/savings).
Benefits are mostly defined contribution based.
Occupational pension schemes will often cover a variety of social risks and provide a range of benefits, including old age benefits, disability benefits, survivors’ benefits, child benefits and critical illness benefits.

Taxation and social security contributions

Dependent on pension plan.
Pension payments are not subject to social security contributions.

¹Ceasing of occupational pension: The pension is part of the salary; therefore, pension savings cease in connection with job change, dismissal or leave. Termination of the pension contribution does not entail termination of the pension scheme. The pension customer will continue to have the right to participate in the pension scheme, but not the insurances. Most often, the pension customer can choose between: (1) continuing the pension as a private scheme where the pension customer pays contribution, (2) switching to a scheme where the insurance coverage continues for a period and is paid by the pension depository, (3) switching to a scheme where the insurance cover lapses but where the pension deposit continues to exist, or (4) to transfer the scheme to another pension scheme under which the pension customer is covered through a new employment relationship.

Legal Basis: Regulated by collective agreements (Overenskomstbaseret).