Pension companies in Denmark's Forsikring & Pension (F&P) are on track to make a record high contribution to the Treasury of around DKK 50bn in proceeds from the PAL tax on Danes' pension savings in 2021.

Whilst a previous record high contribution of DKK 38bn was made in 2019, the strong returns made by Danish pension funds is expected to push the proceeds from the pension tax to a new record of DKK 50bn for 2021.

F&P also emphasised that the PAL contribution from F&P members alone is around DKK 14bn more than the estimated total revenue from the tax in the Finance Act for 2022 and the Financial Statement from December 2021.

In addition to this, the group noted that the total contributions to the Treasury in relation to the PAL tax in 2021 will be even greater than the DKK 50bn from F&P members, as it also includes pension returns from the banks and ATP.

“The Danish pension customers got some really good returns in 2021, and it does not only benefit the individual," said F&P CEO Kent Damsgaard.

"To that extent, it also benefits the Treasury, where the contribution in pension tax from our members has the prospect of reaching a record high of DKK 50bn.

“In many ways, our pension schemes have taken over the role that the North Sea once played for the national economy. So even though few people may have heard of the PAL tax, it has enormous significance as a contribution to the financing of our society and welfare.

“The government has just presented a bill on a so-called social contribution, which introduces a special tax on our members to finance the Arne pension.

"I hope that the record contribution from the pension tax here gives reason to really reconsider the sense in imposing an extra tax on our members and the Danish insurance and pension customers.”

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