Private Pension Schemes

Voluntary insurance

• All individuals.
• Banks often request a Danish social security number (CPR-nummer).

General finances

• Fully funded personal pension plans based on personal contribution payments.

Contribution payments

• Individuals provide contribution payments.
• Amounts depend on pension plan.

State support & incentivising strategies

• For old age insurance (Aldersforsikring)/old age savings (Aldersopsparing): there is no tax deduction on contribution payments; benefits are not taxed at the time of payout.
• For other pension plans: the taxation of contributions depends on the pension plan.
• The bank or pension/insurance company automatically pays 15.3% tax on all pension returns.

• Pension plan providers (banks, insurance companies, or investment funds) manage pension funds and pay benefits directly to the individual.
• The Danish Tax Agency (Skattestyrelsen) administrate deductions and taxes.

• Retirement age depends on pension scheme, age and time of pension plan commencement.
• Pension plans commenced before 01/01/2018: earliest retirement age is 5 years before state pension retirement age.
• Pension plans established after 01/01/2018: earliest retirement age is 3 years before state pension retirement age.

Pension payments

• Depend on pension plan.
• Pensions are typically paid as a lifelong annuity (paid monthly) or instalment.
• Old age insurance (Aldersforsikring)/old age savings (Aldersopsparing) can be paid as a lump sum, instalment or lifelong annuity.

Taxation and social security contributions on pension payments

• Payments of old age insurance/old age savings are not taxed at the time of payout; for other plans, taxation of benefits depends on the specific regulations of the plan, but withdrawal before retirement age is taxed at 40%.
• Pension payments are not subject to social security contributions.