Types of pension schemes in Denmark


When you have lived in Denmark for a number of years, you are automatically entitled to a state pension. Many people also have a company pension or a collective pension as part of their contract of employment. It is also possible to set up a private pension scheme on top of this.

Different types of pension schemes

State pension scheme: Anyone who has lived in Denmark for 40 years after turning 15 years old is entitled to a full state pension. The Danish state pension is paid to people over the age of 65.

Statutory pension schemes: These are supplementary pension insurance schemes that are split into two different contributions:

  • ATP contribution: Anyone who works more than nine hours per week pays an ATP contribution in addition to their state pension. The worker pays a third of the ATP contribution, with the employer paying the rest. All contribution payments are automatically deducted from the monthly salary. The pension will be paid out to the workers when they turn 65.
  • SP contribution: Contribution to the ‘special pension savings’ is 1% of your gross income and is also deducted automatically from your monthly pay. This contribution can be paid out in one go if the size of the payment is low enough. Otherwise it will be paid out in instalments over 10 years.

Collective pensions: Very common in the public sector, these schemes are determined by the key parties in the labour market as part of a collective agreement within the relevant industry. They also often provide a health insurance policy which will cover you in case of disability, critical illness or death.

If you are employed in the private sector, it is not as likely that you will automatically be able to take out a collective pension scheme. You should check this with your employer. If there is no such pension scheme available, you can get the same or similar savings and insurance options through a company pension scheme.

Company pensions: These are a common feature in Danish employment contracts and are considered an important complement to the state pension scheme. Employees are usually offered this pension scheme during the recruitment process. Between the worker and the employer, approximately 15% of the employee’s salary is paid as a contribution to the scheme. Companies in the private sector often have an agreement with a pension fund which offers an additional health insurance policy, covering disability, critical illness and death.

Private pension schemes: You are able to set up a private pension scheme with a pension fund or a bank. Your level of income will normally determine whether the money will be paid out as a single payment (capital pension scheme) or in instalments.

What if I already have a pension scheme in my home country?

In this case you can choose to either keep the scheme you have in your home country, or you can start a new one in Denmark. However it is not possible to obtain a tax allowance in Denmark if you have a pension scheme in your home country, though there are various exceptions for citizens of Switzerland, Holland, Sweden and Great Britain.

Further reading

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