DENMARK - Members of Denmark's closing SP pension scheme are likely to put the money that they will get back into savings and pensions, rather than simply spending the extra money, according to a new survey.
Pensions administrator PKA, which conducted the survey, said: "The government's decision to wind up the SP savings scheme will hardly give the economy a helping hand. Because of the economic crisis, many PKA members want to put the SP savings aside for their old age."
PKA polled 1,000 members of its eight pension funds, most of whom are women, and asked them what they would do with the SP money they will receive when the government savings scheme is wound up. The poll was conducted twice - once in May and again in September.
In September the proportion of people questioned who said that they would reduce debt, save, add to their pensions and spend it remained relatively similar to the earlier survey.
But among those respondents who said they would use the money for both spending and saving, there had been a marked shift. More than 80% of this group now in September said they would save more than half of the SP money, up from only 50% in May.
"The government's plan to give Danes the opportunity to withdraw their SP savings, thereby giving the economy a boost, has not met with much support among PKA's members," commented PKA .
The SP scheme - Særlig Pensionsopsparing, or Special Pension Saving Scheme - is a minor second pillar mandatory scheme which has run alongside Denmark's giant Labour Market Supplementary Pension Plan (ATP) for the last decade. During that time, the scheme has been reshaped several times, and there have been calls in the last few years for it to be closed altogether.
In much the same way as a monetary policy instrument, the government has used the SP scheme as a way of regulating the economy.
In May this year, the government announced that SP members could withdraw their money. When 83% did so, it said it would put forward a bill to close the scheme completely. The consultation period is now over and the law is expected to be passed soon.
The scheme will be officially closed on 30 April 2010, and all members who have not withdrawn their funds or transferred them to another pension scheme will then have their money automatically transferred to their bank accounts.
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