One of the best pension systems in the world?

Fritz Von Nordheim, Jon Kvist

Publikation: Bidrag til bog/antologi/rapportBidrag til bog/antologiForskningpeer review


The transition from large to small working age cohorts and perpetually increasing longevity presents major challenges to pension systems around the world. In this context, the Danish system has been highlighted as particularly adequate and sustainable, although often developed more as element in macro-economic and fiscal policies than pension visions and certainly enabled and bolstered through other policies, such as fixed exchange rates, debt reduction, wage restraint, employment maximation and tax reform. The combined effect of six distinctive pension policy features places Danish pensions in the super-league of national systems: (1) a generous minimum pension providing all residents with basic old age security; (2) progressive redistribution resulting from the integration of public and private pension benefits; (3) high occupational pension coverage, with sizable contributions offering immediate membership, vesting and full portability of rights; (4) the tax regime, where investment return taxation substantially reduces the fiscal pressure from tax-exempting gross income in the build-up period and deferral of income tax until benefits are paid out, secures a revenue windfall at the height of ageing; (5) the linking of pensionable ages to life expectancy, which aims to lower pension costs, increases labour supply, growth and tax revenue and (6) the regime for third pillar schemes preventing their use in tax planning. Although the Danish pension experience has its obvious peculiarities, lessons for other governments can be found in the public‒private benefit integration, the tax regime, the life expectancy indexing of pensionable ages and the use of pensions in economic policies.
TitelPublic Governance in Denmark : Meeting the Global Mega-Challenges of the 21st Century?
RedaktørerAndreas Hagedorn Krogh, Annika Agger, Peter Triantafillou
Antal sider18
UdgivelsesstedBingley, UK
ForlagEmerald Group Publishing
Publikationsdato23 feb. 2022
ISBN (Trykt)9781800437135
ISBN (Elektronisk)9781800437128
StatusUdgivet - 23 feb. 2022


  • Pensions
  • Ageing population
  • Longevity risk
  • Retirement age
  • Older workers
  • Pension reforms

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