DENMARK - Denmark’s right-wing populist Dansk Folkeparti has called for an end to payments into the special pension arrangement, the Særlige Pensions ordning (SP).

SP was established in 1999 at a time when the Danish economy was overheating, to absorb one percent of Danish employees’ gross salary. It has since been managed by ATP and at end-2003 had assets in the region of DKK50bn (€5.8bn).

Payments into the system were stopped two years ago as part of a tax-cutting package and are due to be resumed at the beginning of 2006.

According to Kristian Thulesen Dahl, the head of the Dansk Folkeparti’s parliamentary group, restoring payments to SP would take some DKK4bn a year out of current consumption. He claimed that the Danish economy no longer needs to reduce spending and that it is wrong to make payments into the SP mandatory.

The recently re-elected government is a coalition of prime minister Anders Fogh Rasmussen’s Venstre and the Conservative party which between them have 70 seats in the 179-member Folketing. The Dansk Folkeparti, with 24 seats, supports the coalition from outside the government.

The governing parties have yet to formally respond to the Dansk Folkeparti’s call but Venstre financial spokesman Peter Christensen signalled that the party would be ready to discuss axing the SP arrangement. He added that ATP has invested millions of kroner in building up a folkebørse platform to enable those who wish to continue additional savings so there was no argument for keeping the SP.

However, Conservative tax spokesperson Charlotte Dyremose proposed that while the current suspension of SP contributions should be maintained, the SP arrangement should be kept as a potential financial management instrument. She said should a tightening be required in the future it would be better to increase pension contributions than increase taxes.

The Conservatives’ view is that were SP to be abandoned altogether it would be impossible to recreate because of the current tax arrangements.