Danish pension company Velliv has commended the country’s Pension Commission for several of its proposed initiatives, while issuing a series of recommendations it believes would help improve the Danish pension system.

Earlier this month, the Pension Commission made several proposals that aimed to improve the country’s pension system, including removing the set-off when contributing to old-age savings and allowing pension savers to contribute a higher amount for seven years, rather than the current five years.

Velliv stated that it must be made more economically attractive for workers to remain in the labour market, noting that while the new bill to remove set-off was a “good step”, more should be done to increase the incentive for those with lower wages.

The company proposed that an actual job deduction directly targeted at seniors should be introduced, as it said this could incentivise lower-paid groups to continue working.

Velliv also called for greater induvial flexibility, recommending that early partial pension withdrawal be made possible earlier than the existing three years before retirement age.

Furthermore, it suggested that the Pension Commission should look at how pension savings can be included as part of the financing education later in life, as it believes there is an increasing need to seek further or new education in later life due to rising life expectancy.

Finally, Velliv recommended that the pension system should be made simpler, warning that although it and the Pension Commission agreed on this, it thought this would not be achieved by changing the amount limits alone.

On the commission’s proposals, Velliv commended it on its plan to address the rising retirement age, its proposal to enable pensioners to pause their instalment pension, and plans for better incentives to save for retirement through larger extra deductions on payments.

"The commission's proposal for a change in the state pension age strikes a fine balance between what is good for public finances and good for the individual,” commented Velliv chief economist, Jens Christian Nielsen.

“But the proposal pulls 80,000 people out of the workforce. And that's a challenge. The commission is silent, but answers must be found.

“We want greater flexibility, with the individual at the centre, so that Danes are encouraged to work longer. This applies to both the time before and after retirement age.

“It will be more the rule than the exception that Danes get 50 years in the labour market. Society needs it. Therefore, we must find flexible solutions that benefit the individual Dane both humanly and financially. And here I miss several concrete proposals from the Pension Commission. The set of rules today is more of a straitjacket for the Danes' free choice.”

Share Story: