Insurance and Pension Denmark (I&PD) has blasted the Danish Social Liberal Party, known as Radikale Venstre in Danish, for its plans to bring forward a ‘green tax’ on pensions.

As part of its plans for a 110 per cent green Denmark, the party has proposed the creation of a DKK 25bn Danish Climate Fund. It proposed to raise these funds by bringing forward a tax on the capital of pensions, to allow the state to bring in tax revenue now instead of when pensions are paid. Radikale Venstre argues that this will not lead to an increased tax burden, as it only advances the taxes that citizens would pay anyway.

However, I&PD has blasted the proposals as “unnecessary and harmful” to the confidence in the pension system, arguing that in the past year the Danish pension industry has invested DKK 72bn in the green transition.

“The Danish pension industry has really taken on the responsibility of investing in the green transition – and at the same time creating returns for pension customers,” I&PD CEO, Kent Damsgaard, stated. He believes it would be better to support the industry and create the best possible framework for investments instead.
Advancing pension taxation would also create unnecessary uncertainty for pension savers, Damsgaard added.

“We have one of the world's absolute best pension systems, partly because Danes trust it. It would be completely skewed if, from a political point of view, you went in and taxed Danish pension customers before the money was paid out.

“The proposal means that Danish pension customers would be forced to convert their capital pension to an old-age pension – despite the fact that the same customers have previously chosen to keep them as a capital pension when politicians introduced a temporary scheme to convert to lower tax. It would be completely unreasonable if they now had to be forcibly converted."

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