2. Pensions Pensions should cover your potential risk of losing your income, i.e.: - Risk of losing working capacity - Risk of dying - And your risk of surviving

3. Pension  Statistics: The average retirement age for people is according to Danmarks Statistik 64 years for men and 61,5 years for women 12 out of 100 young people do not live to experience retirement….. 12 our of 100 young people loose their working capacity before retirement…… Average life expectancy for men is 76 years and 80 years for women – and rapidly increasing  www.dts.dk or www.statbanken.dk www.dts.dkwww.statbanken.dk  Why do we need pension schemes?  Financially secure life in retirement  Insurance against loss of working capacity  Insurance for the family in case of death

4. Which needs does a pension scheme cover?  Security in retirement State pension Labour market schemes Private pension schemes Equity in property etc.  Security if dyeing Life insurance (lump sum payment) Pension for spouse and/or children (usually time limit)  Security if loosing working capacity Maintain standard of living even if income disappears or is being reduced

5. EFRP 2011

7. Country results

9. How to measure a pension system:  Adequacy Do you receive sufficient amount of money?  Sustainability How much and for how long can the government afford to pay pensions?  Integrity Can you trust the system? Are your savings safe?

11. How to improve a pension system:  Increase retirement age  Promote higher labour force participation in old age  Encourage higher levels of private investments  Increase the coverage of employee pension savings  Reduce the leakage from the retirement savings system prior to retirement

12. Saving for retirement  The Danish Pension system: Tier 1  State pension  https://www.workindenmark.dk/en/Find_informatio n/Information_for_job_seekers/Working_in_Denmar k/Pension https://www.workindenmark.dk/en/Find_informatio n/Information_for_job_seekers/Working_in_Denmar k/Pension  ATP, SP, LD Tier 2  Labour market schemes Tier 3  Private pension schemes

13. Suppliers of pension schemes  Labour market pension schemes  Company pension schemes  Collective agreement pension schemes ex. Finansforbundet, HK etc.  Insurance companies Traditional group scheme –  Traditionally only periodic payment schemes – now possible to combine other types of schemes Unit link – i.e.. ”your own account” – all forms of pensions schemes  Banks Banks cannot offer periodic payment schemes but only capital and annuity schemes However they can now offer all types through partners

14. Types of Pensions  Annuity pensions (Ratepension)  Periodic payments policies – life annuity (Livrente)  Retirement pension (Aldersopsparing)  Pensions for the self-employed  ”ATP” – compulsory scheme when you work  ”SP ” – compulsory – currently suspended (Special Pension)  Pensions no longer available Capital pensions - lump sum ”LD” ”Selfpension” Indexed schemes

15. Tax and pension  Contributions are tax deductible for all annuity pensions (certain rules apply) (not retirement pension)  Amounts paid out are taxable as personal income (not retirement pension)  Tax on return on investment when placed in pension schemes = 15.3% for all types of investments

16. Early retirement (Efterløn)  All your pensions affects your early retirement  New rules: Early retirement from 63/64 yrs.  Max. approx. DKK 200,000 per year for 3 years  All other pension savings are deducted – so approx. 4% of the total invested sum is deducted every year Ex. 3 mill. total pension savings: 4% = 120,000, hence early retirement is reduced to 200,000 – 120,000 = 80,000

17. State pension, housing grants etc. – ”Social payments”  Pension instalments, which are paid as personal income (annuity pensions and periodic payments policies) affects all Social payments as state pension and housing grants etc.