SP access opened to stimulate Danish economy
DENMARK - All Danish employees will from 1 June until the end of the year be allowed to access their special pension (SP) savings, even though they may not be retiring any time soon.
Over three million Danes have an SP-savings plan and the average sum of money held in each retirement account is approximately DKK14,600 (€1,959), however access to these savings is now being opened by the government as part of a tax reform initiative designed to help stimulate the Danish economy through consumer spending.
It is unclear at this stage how many people will accept the offer and withdraw their money but pension officials estimate around one-quarter, or roughly 760,000 will accept the offer.
This means ATP, which manages the SP, is expecting to have to pay out DKK11bn though the scheme is run as a separate fund worth DKK42.9bn so ATP will have no difficulty in finding the money.
The interest in getting access to SP savings is understood to have been immense as the volume of people curious enough to find out how much they had saved in their SP Account forced ATP's website to collapse yesterday afternoon (2 March).
One group of people who are expected to claim access to their funds, according to Lars Rohde,chief executive of ATP, are those due to retire in the latter half of 2009.
"If you stand directly in front of a retirement date and must choose between getting paid 10 instalments of income tax or receive it at once with a lower tax, the choice is not so difficult to make", he said.
The government will then close universal access to SP funds from 1 January 2010 and the scheme will continue function under current rules requiring retirees to reach age 65 before claiming their SP pension assets.
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