DENMARK -The Danish government, the Liberal Conservative coalition, looks set to raise the retirement age above 65.
In his opening address to the Danish national parliament in October prime minister Anders Fogh Rasmussen indicated that raising the retirement age would form part of the reform package to be presented by the government early next year.
“Over approximately the last 20 years, the part of our life that we primarily spend in the labour market has dropped by approximately two and a half years, whereas the part of our life that we spend in retirement has grown by two and a half years,” he said.
“It goes without saying that this is is unsustainable. It will be necessary for us to gradually postpone the point in our lives when we normally retire from working life.”
Contrary to governments efforts throughout Europe, Denmark reduced the retirement age in 1999 from 67 to 65. However, the average retirement age in Denmark is currently 61, thanks to Efterløn, the early retirement system.
Pressure on Efterløn is forcing the government to consider scaling back the system. Under Efterløn, which is for people aged 60 to 65, you can retire and receive public benefit similar to the unemployment benefit.
Ulrik Nødgaard, deputy permanent secretary of the Ministry of Economic and Business Affairs, commented: “Denmark is facing problems in the labour market; we have very low unemployment, we have a lack of labour in some sectors and having a system like the early retirement system, which essentially pays people to stop working, magnifies these labour shortages.”
He added: “You could for instance imagine the official retirement age of 65 would move and as longevity increases, it will become higher and higher. It’s very likely that will probably be part of the solution.”
Carsten Schmidt at Aon in Denmark said the early retirement system was not functioning as was originally intended.
“Efterløn was implemented when the unemployment rate was pretty high and there was a need to decrease the work- force,” he said. “It was also implemented at a time when you had a lot of physical workers so it was a relief for these people to be able to retire earlier instead of working to age 67. Today the system is used by everybody.”
The Welfare Commission set up by the government to produce a white paper on the country’s ageing population will present its final report with proposals for reforms of Denmark’s welfare society in December.
Fogh Rasmussen said: “Although I do not wish to anticipate the contents of the Welfare Commission’s proposals, a central theme will be the question of retirement from the labour market.”
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