The Danish government announced a new senior pension initiative on May 2, ahead of the European Union elections scheduled for May 23. The new reform will allow workers who are physically unable to continue working to retire six years earlier than the official retirement age, which currently stands at 65. However, the issue of a fixed retirement age for workers remains unaddressed.
In order to qualify for the new pension service, a worker must have worked full-time for 20 to 25 years, and his/her work ability must be 15 hours a week or less. The initiative retains the earlier provision that people with significant or permanently reduced working capacity who have less than six years to the retirement age should be able to get flexible jobs with reduced work hours immediately at their previous workplace.
Arbejderen (The Worker), a publication of the Communist Party, claimed that with the new initiative, Danish prime minister Lars Løkke Rasmussen was trying to close the debate on retirement age, which is considered a hurdle in the run-up to the elections. The small concession comes after hard pressure from the labor movement and a deep dissatisfaction among the people due to the fact that with the current retirement age, many have to work until they die.
According to the existing norm, the retirement age in the country will increase to 67 years by 2022 and will further increase by a maximum of one year every five years from 2030 onward, depending on increases in average lifespan.
The Communist Party acknowledged the provision of early retirement for those who are unable to work, but also stated that retirement must be a universal welfare benefit for everyone from the age of 67. Larger trade unions in Denmark also called for the termination of the welfare agreement promulgated in 2006 and demanded a concrete proposal on the retirement age.
In 2006, the Danish People’s Party, the Social Democrats, and the Radicals reached an agreement that the retirement age must increase as the average life expectancy becomes higher.
The announcement of the new senior pension initiative was made after the right-wing Danish People’s Party and the Danish Social Liberal Party reached an agreement on the plan. The Social Democracy, the major opposition party, claimed that the government had rejected its proposals and that the current plan for the initiative is not enough to accommodate a large number of employees who want to retire earlier due to ill health.
While the government communicated that an estimated 17,150 workers would benefit from the scheme, when fully phased in by 2025, the Social Democracy party rejected the claim. Citing sources from the Ministry of Employment, it said that “under the new provisions, only 800 regular workers will be able to avail the benefit of the scheme by 2025. Most of the other beneficiaries will be normal retirees and minimum hour employees who are in a transition period of retiring.”