Retirement at 70?

This decision by the Danish Parliament, attracted considerable attention not only in Denmark but also abroad, especially in Germany where the sustainability of the pension system is under pressure.

In her new impulse paper, Retirement at 70? Why the Danish Retirement Age Only Works as Part of a Comprehensive Package, Meike Büscher, Policy Advisor at the FES Nordic Countries Office, looks at the Danish pension system.  

In international comparisons, Denmark’s pension system is frequently highlighted as a model due to its long-term financial stability, low levels of old-age poverty, relatively high pension benefits, and comparatively small gender pension gaps. However, the paper argues that these outcomes cannot be attributed to any single element of the system. Focusing solely on the retirement age risks overlooking the broader institutional and political framework that makes the Danish pension system. 

The experiences from Denmark show that the interaction of the pension system with various elements of labour‑market policy is a decisive prerequisite for a stable old‑age security. In particular, the strong redistributive elements—such as the comparatively short standard full‑time work norm and the high coverage by collective agreements—are important components. The significant role of the social partners, also in connection with high investment in qualifications, a high wage level and high productivity, must likewise be taken into account. 

Did you know? 

• The state pension in Denmark (Folkepension) is funded entirely through taxation and is not earnings-related; 
• More than 90% of workers have an occupational pension scheme; 
• A standard working week of 37 hours enables people to remain in work for longer and boosts female participation in the labour market; 
• High wages and salaries support a stable pension system;
• The strong social partnership and collective agreement coverage of over 80% promote good working conditions.

Furthermore, the paper also highlights the limits and challenges of the Danish pension system.

The paper provides insights into:

• The development and structure of Denmark’s old-age pension system;
• Early retirement and disability pension schemes;
• The pension system in context of the Danish labour market and welfare state 

By placing the retirement age within its wider policy context, the paper offers a nuanced understanding of Denmark’s pension system and identifies lessons that may be relevant for policymakers and researchers beyond Denmark.

The impulse paper is only available in German and can be downloaded here: Rente mit 70?

If you have questions or remarks, do not hesitate to contact meike.buscher(at)fes.de