What does Denmark’s new welfare plan mean for pensions system?

The pensions scheme, referred to as the ‘Arne-plus scheme’ was named in the policy paper agreed by the coalition government when it took office in December last year.

But it will not move forward, with the government now preferring to promote higher engagement on the labour market for seniors while also providing fair options for earlier retirement for those who need to do so, Finance Minister Nicolai Wammen said as he presented the government’s ‘2030 Plan’ for welfare spending.

Wammen also said the government wanted "calm" in relation to pension and potential changes to existing schemes.

The early retirement scheme, commonly known as the “Arne pension”, was introduced in August 2021 and enables long-term members of the Danish labour market to apply for early retirement.

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. 

READ ALSO: Who can apply for Denmark’s 'Arne pension' early retirement?

A plan to expand this scheme will not be moved forward as previously expected, Wammen confirmed.

“The government will discuss increased employment and dignified withdrawal in the upcoming permanent tripartite institution,” he said in reference to forthcoming talks with representatives from employer confederations and trade unions.

“I hope the decision we have brought with us today will provide some peace of mind,” he added.

Specifically, the government policy paper set out plans to combine the ‘Arne’ pension with the seniorpension, an older pension scheme for people close to retirement age whose physical ability to work full-time has declined.

The plan for the so-called ‘Arne-plus scheme’ would have provided a higher monthly pension of 15,000 kroner for recipients of the existing ‘Arne’ pension while phasing out the higher senior pension of 19,700 kroner, which can also be granted earlier.

But the existing schemes will stay in place until further notice following Tuesday’s announcement.

A number of opposition parties, including some whose core voting groups include seniors and pensioners, received Tuesday’s statements from the government positively, saying they provide clarification. The parties in question are the Conservatives, Danish People’s Party and Socialist People’s Party. All three have called for more predictability and stability in relation to pensions.

The Confederation of Danish Industry (DI) was critical of the decision to reverse a plan set down in the coalition policy paper.

“It would be very regrettable if the government lowers its ambition of keeping more seniors on the labour market. There is great need of more labour in both the public and private sectors,” DI deputy director Steen Nielsen said in a written comment to Ritzau.