Public sector workers retired at 66 years old on average in 2023, seven months earlier than private sector workers, according to research from Insurance and Pensions Denmark (I&P Denmark).

If the retirement age were the same, I&P Denmark said, it would correspond to a potential of 4,500 additional full-time employees and 6,500 total employees.

Since 2010, public sector employees have, on average, retired five-12 months earlier than private sector employees.

“In a time of severe staff shortages, including in welfare professions, there is great potential for more valuable employees if they can be retained in their jobs a little longer,” suggests I&P Denmark director, Jan V. Hansen.

“For example, by providing a more flexible transition between working life and retirement.

“It can be difficult to recruit, especially within the welfare professions. There is, therefore, significant potential in improving the ability to retain older employees in employment in the public sector.

“Many employees in the welfare professions in the public sector are approaching retirement age. However, the lower retirement age in the public sector indicates that there is significant potential in becoming better at retaining older employees a little longer in work if they can and want to,” added Hansen.

In 2023, I&P Denmark revised their data to include several retirement forms that lower the retirement age in the private sector relative to the older statistics, which reduced the difference in retirement age between public and private employees.

One new form of retirement is self-retirement, which uses labour market, private, and civil servant pensions.

In the definition of public and private sector, public enterprises such as the Danish train company are classified as enterprises in the private sector. This means that self-retirement using civil servant pensions is also included as retirement in the private sector, which reduces the retirement age in the private sector relative to previous calculations.

This resulted in the difference in retirement age between employees in the private and public sectors in 2021 being reduced from 16 to 11 months.

“Flexibility in the pension system may be a key to keeping some older employees in work longer and thereby strengthening employment in the public sector,” Hansen continues.

“For example, it is better for some to work slightly fewer hours as long as they are in work, rather than to retire.”

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