Denmark’s pensions industry saw contributions continuing on a similar upward trajectory in 2020 to the rate of growth seen before the pandemic, according to data just released, with Danes paying in a record-breaking DKK132bn (€17.8bn) during the year.
This was DKK4.5bn more than in 2019, a year which had also seen a rise in total contributions to labour-market and private pension schemes of DKK4.5bn, the data showed.
Insurance and Pensions Denmark (IPD) said that even though employment had taken a hit in the Nordic country, this had primarily been in the hospitality industry, where many workers did not have occupational pensions.
Kent Damsgaard, chief executive officer at IPD, said: “So there is extra reason to hope that the summer package [of economic stimulus measures just agreed] will give a fresh start to the hard-hit industries.”
The Danish government announced earlier this month it was introducing a summer business aid package, part of which included DKK178m set aside for hard-hit sectors such as hospitality, and grants of up to DKK35,000 for restaurants, enabling them to provide discounts and other measures to attract tourists over the summer and autumn.
At IPD, Damsgaard said the pandemic had had a particularly pronounced impact on those industries where occupational pension schemes were less common, such as hospitality and freelance workers, many of whom had been on wage compensation schemes, but many had also lost their jobs or not had any freelance work.
He added, however, that the pandemic had caused an increase in employment in the health sector, with new jobs created concerned with testing and vaccination, and employees in the sector which was generally covered by collective occupational pension agreements.
“So in addition to the fact that the Danish economy has generally recovered some of what it lost, this may help to explain why pension contributions set a record last year.” Damsgaard said.
Back in January, Denmark’s P+ – which labels itself as the pension fund for professionals with higher academic qualifications – reported that its members had made record levels of additional contributions into the pension scheme during 2020.
P+ attributed this to the uncertainty brought on by COVID-19, and the fact banks were imposing negative interest rates on customers’ savings accounts, among other things.