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PENSIONS

Who can apply for Denmark’s ‘Arne pension’ early retirement?

A rule introduced in August 2021 enables long-term members of the Danish labour market to apply for early retirement.

Published: 22 June 2022 14:04 CEST
Who can apply for Denmark’s 'Arne pension' early retirement?
Arne Juhl, who became the face of the government's early retirement scheme, embraces Prime Minister Mette Frederiksen at a Social Democratic conference in 2019. Photo: Henning Bagger/Ritzau Scanpix

The early retirement scheme, commonly known as the “Arne pension”, was a prominent part of the Social Democratic party’s campaign platform when it was elected in 2019.

Since it was formally introduced last year, 37,700 people have already been granted an early pension under the new rules, Employment Ministry figures, released on Wednesday, reveal.

More than 50,200 people have submitted applications for the new ‘Arne pensions’ since August last year. 

The scheme allows people aged 61 or older who have spent more than 42 years in the labour market to retire before the age of 67, which is the current age to draw Denmark’s state pension, folkepension. 

Workers who have logged 44 years in the labour market by the age of 61 can retire three years ahead of schedule, while 42 and 43 years earn you a one- or two-year advance, respectively. 

The age at which the early retirement can be taken will, however, increase in years to come, alongside the general retirement age, which is also scheduled to increase.

People born from 1965 onwards will be able to apply for the early pension at 62, while that increases to 63 for people born from 1969 onwards. The number of years needed on the labour market to qualify increases concurrently.

Graphic: borger.dk

“We are both pleased and proud that we have created a scheme which allows people who have had a long and tough working life to step back before they get too sick or are so worn down by the labour market that they have no choice,” Employment Minister Peter Hummelgaard told news wire Ritzau.

The Social Democrats announced a proposal to introduce an early retirement scheme a part of the party’s 2019 general election platform. In the campaign, a picture of brewery worker Arne Juhl was used along with the text Nu er det Arnes tur (“It’s Arne’s turn now”). The early pension scheme subsequently became known as the “Arne pension”.

The scheme is not popular across the board. Conservative party leader Søren Pape Poulsen has called is “pure socialism”, while conservative parties have also criticised it for reducing the labour force at a time of shortage.

Early retirement should be based on individual assessment, according to critics.

People in the building and abattoir sectors are among those who have used the scheme most, according to Ritzau.

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PENSIONS

READER QUESTION: How many years do I need to work in Denmark to qualify for the state pension?

Danish citizens get a state pension (folkepension) when they retire, but what about foreign nationals who have lived and worked in the country?

Published: 20 March 2023 11:32 CET
READER QUESTION: How many years do I need to work in Denmark to qualify for the state pension?

Danish nationals resident in Denmark qualify for the country’s state pension (folkepension) when they reach the retirement age.

Currently, the retirement age is 67, because people who reach their 67th birthday in 2023 were born in 1956.

The retirement age is set to go up to 68 years for people born from 1963 onwards, and it has been lower in the past. You can see the retirement age for a range of birth dates in the table below.

Date of birth

Retirement age

Up to December 31st 1953

65

January-June 1954

65.5

July 1954-December 1954

66

January-June 1955

66.5

July 1955-December 1962

67

1963-1966

68

1967 or later

69

The future retirement ages are not set in stone – the Danish government can change them to bring them in line with extended life expectancies.

In general, you must fulfil three criteria to qualify for the Danish state pension: you must be a Danish citizen, reside in Denmark and have lived in Denmark for at least three years between the age of 15 and retirement.

However, exceptions to these rules apply, notably for foreign residents of Denmark.

It is also worth noting here that these rules only relate to the state pension. You may have a private pension in Denmark or your Danish employer may have paid into a fund on your behalf.

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If you are not a Danish citizen you can still qualify for the state pension if you have lived in Denmark for at least 10 years between the age of 15 and retirement age. In this case, you must have been living in Denmark for at least the last five years at the time you retire and are granted the pension.

Citizens of EU and EEA countries and Switzerland do not generally need to be a Danish citizen to qualify for the national pension, and are therefore covered by the same rules as Danes.

British nationals, who are no longer citizens of an EU country as of 2021 following the end of the Brexit transition period, are still eligible for the Danish state pension if they fulfil the regular criteria. This is because the UK and EU agreed to continue reciprocal pension arrangements after the UK left the EU.

This means that both Danish citizens resident in the UK, and British citizens resident in Denmark are still eligible for the Danish state pension.

Refugees may also qualify for the state pension under certain sections of Denmark’s Aliens Act (Udlændingeloven). However, different rules apply for refugees who arrived in Denmark after September 2015.

How much pension do I qualify for?

The amount of Danish state pension you can receive depends on the number of years you have lived in Denmark between the ages of 15 and retirement.

If you have worked and earned social pensions in other countries, these periods of time do not normally count towards your Danish pension, even if you lived in Denmark when your income was based abroad.

You qualify for the full state pension if you have amassed the equivalent of 40 working years in Denmark in the period in which you can earn pension (working age).

You can also receive the full pension if you lived in Denmark for nine tenths of the period between your 15th birthday and retirement age.

If the amount of time you have lived and earned pension in Denmark is less than this, you can receive a partial pension or brøkpension to give it its Danish term. This will be calculated based on the amount of time you lived in Denmark in the period that qualifies for pension accrual (not including periods in which you earned pension in other countries by working there).

What about pension I have earned outside of Denmark?

Whether you can receive a foreign pension in Denmark depends on the rules in the country where you earned that pension. When you apply for the Danish pension, however, your application automatically becomes an application for pension in other EU/EEA countries and Switzerland as well as other countries with which Denmark has agreements (conventions) in place.

The Danish authority responsible for paying out pensions, Udbetaling Danmark, forwards your application to authorities in the relevant country based on your personal information. More information on this can be found (in Danish) here.

Source: borger.dk

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