Danish pension lobby criticised for ‘desperate attempt’ to avoid funding reform

Finansforbundet, the union for the Danish financial sector, has criticised the association, Insurance and Pension Denmark’s (F&P) “desperate attempt” to avoid paying the proposed ‘special tax’ that would fund early retirement for thousands of Danes.

In a post on Facebook published today, 18 September, Finansforbundet deputy chairman, Michael Budolfsen, criticised F&P’s new director, Kent Damsgaard, for insisting that the pensions and insurance sector should not have to pay the tax and it instead fall on banks to foot the bill.

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.

“I think F&P should recognize that their members are part of the financial sector and work together with Finans Danmark to insist that a tax on the financial sector is a bad idea for the whole of Denmark. The figures from the Ministry of Taxation clearly state this,” Budolfsen wrote.

The government’s reason for proposing that the financial sector help fund the reform is that banks were helped out during the financial crisis of 2008-09. Damsgaard has highlighted that the insurance and pension sectors did not get this help and therefore should not have to pay the special tax.

However, Budolfsen said it is “embarrassing” that an industry player is trying to pass a “bad idea of financing” onto their colleagues in the industry.

In his post, he is criticised a former judge of the European Court of Justice, Bo Vesterdorf, who is also against pension companies having to pay the special tax.
“With 18 years as a judge, he is certainly good at assessing law, but I do not see that he has much insight into how a pension sector in Denmark works today,” he said.

Earlier this month, Damsgaard said the Danish government “owes and answer” to the insurance and pension sectors on why they should have to help finance the reform.

“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?,” Damsgaard wrote.

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