The Danish government “owes an answer” to the pension and insurance industries over its plans to introduce a special tax on the financial sector to fund its early retirement policy, Insurance and Pension Denmark CEO, Kent Damsgaard, has said.

In a written comment published on the associaiton’s website, Damsgaard explained that the government feels it has a right to introduce the tax due to the last financial crisis, among other things. However, he noted that the proposed tax would not only apply to banks but also pension and insurance companies.

“If it is not designed very precisely, it will also affect the insurance and pension companies,” he said. This, he believes, would hit the customers of these companies.

The government plans to allow those aged 61 who have spent between 42 and 44 years in the labour market to retire early. It expects this to amount to 38,000 people by 2022 and is set to cost DKK 3bn. It is proposed that the reform will be half funded by a special tax on the financial sector from 2023.

The motivation behind the reform is to address imbalances from a previous pension reform in 2006, which saw the retirement age increase to 67. Prime Minister Mette Frederiksen told a press conference that the reform will address a “great injustice” in the labour market.

“The government states that the industry must live up to the 'social contract'. The same government has on several occasions praised our industry for our contribution to society. And therefore, we believe that it is relevant to ask the government why the social contract does not go both ways?”

He also criticised the Minister of Trade and Industry, Simon Kollerup, who has previously said that those who live up to the rules and laws in society and the norms and values will “have a strong ally” in the Ministry of Trade and Industry.

To this, Damsgaard asked whether he has “misunderstood” the minister’s promise to “roll out the red carpet” to those that follow these societal rules and values.

In defence of the industries’ good work, he said they are ready to take responsibility in the society we live in, and they “invest massively” in the green transformation.

“We see it as an incredibly important societal task to help solve some of the most important societal challenges we face - for example, achieving the goal of a 70 per cent reduction in CO2 by 2030,” he said.

“This is a task we take very seriously, as is our commitment to the government's climate partnership for the financial sector and the pension industry's extra contribution of DKK 350bn for green transition investments by 2030 shows. In addition, we contribute around DKK 30bn annually to the Treasury.”

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