​Denmark’s IPD lauds political deal on COVID-linked pension set-off

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Agreement by Danish political parties in next year’s budget to extend temporary rules allowing pensioners to be paid for COVID-related work without losing some of their state pension has been welcomed by the country’s pension sector.

Insurance & Pension Denmark (IPD) said in a statement that offsetting such income against pension entitlement was “an inappropriate financial punishment for the many Danes who save up for old age and at the same time are ready to make an extra effort when society needs it”.

The Social Democrat government under Prime Minister Mette Frederiksen presented the 2022 budget (Finansloven) yesterday after agreeing the details with the Socialist People’s Party, the Social Liberal Party, the Red-Green Alliance, the Alternative and the Christian Democrats.

The legislation is expected to be passed by parliament (Folketinget) just before Christmas.

Kent Damsgaard, chief executive officer of IPD, said: “It is so important for our society both now and in the future that the Danes are not punished for saving up – or for going the extra mile when needed. So it is absolutely right that the parties have intervened here.”

He also called on the government and parliament to build on the agreement and take a permanent step towards inappropriate set-off, IPD said.

“We have one of the world’s absolute best pension systems, but there is still great potential for weeding out the interplay problems in the system that affect far too many Danes,” Damsgaard said.

The industry association also said it welcomed the parties’ sub-agreement on new green initiatives.

Damsgaard said it was really positive that politicians were setting aside money for further development of renewable energy.

“The next important step should be a plan for concrete action on PtX [Power-to-X] and a climate adaptation plan, where there is a large joint task for the public sector and members of the insurance and pension industry,” he said.