Danish govt’s plan for finance industry to fund early retirement approved

The Danish government’s proposal to allow early retirement for some workers, partly funded by a tax on the financial industry, has gained approval from opposition parties.

In a statement published by the government on Saturday 10 October, it said it had reached an agreement with the Danish People's Party (DF), the Socialist People's Party (SF) and the Red-Green Alliance.

From 2022, those aged over 61, with 44 years in the labour market will be able to retire three years before the national pension age. Those with 42 and 43 years in the labour market will be able to retire one or two years before the national pension age.

In addition to employment, which includes employees and the self-employed, periods of unemployment benefits, sickness benefits, part-time work, maternity leave and compulsory internship periods with either student pay or State Educational Support will also count. This ensures that those who have worked part-time for more years, or have had periods of unemployment or been an intern, will not be exempt from early retirement.

Commenting, Danish Minister for Employment, Peter Hummelgaard, said: “The Social Democrats went to the polls to introduce a right to early retirement, so that more people have the opportunity to retire in a proper and dignified manner. With today's agreement, we will implement it. Thank you to DF, SF and the Red-Green Alliance for backing the proposal. We have also been helped along the way by a massive backing from a large number of organizations and individuals - also from some who are not in the target group themselves. This testifies to the fact that there is a deep solidarity among the Danes.

“With the agreement, we are not only ensuring greater justice in pension options. We are also strengthening our support for the retirement age to increase as Danes live longer. That principle is the foundation for a strong Danish economy in the future. But when we ask Danes to work longer and longer, we are also obliged to take into account that some working lives wear out more than others, and that some start earlier in the labour market than others.”

However, the pension and insurance industry association, Insurance and Pension Denmark, has said there is “great annoyance” that its industries will be called upon to fund the reform, along with banks. Prior to the agreement it lobbied against the special tax that pension and insurance companies will face.

Insurance and Pension Denmark CEO, Kent Damsgaard, said: “We have clearly recommended that funding could have come from initiatives that would increase prosperity and get more Danes into work, which is also part of the government's understanding paper. Now they have instead chosen a special tax, which among other things must be paid by customers and members of the Danish insurance and pension companies. That, we think, is completely skewed.”

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