Denmark’s Forsikring & Pension (F&P) has urged the government to consider allowing pension schemes to start paying out to members five years before they reach state pension age.

The government has proposed a service overhaul of retirement schemes and opportunities for those aged 60 and over.

This includes the establishment of a tripartite institution with the Confederation of Danish Employers, the Danish Confederation of Trade Unions and the government to discuss important policy areas, such as labour supply, senior pension and early retirement.

“We support extending discussions on withdrawal schemes to all schemes,” stated F&P deputy director, Jan V. Hansen.

“It is a unique opportunity to overhaul a complicated system that has developed by leaps and bounds over many years.

“It is particularly important to achieve efficient and smooth interaction between public and private schemes.”

F&P said it was specifically looking at the “complicated rules” for when Danes can receive their pension at the earliest stage.

Currently, the earliest payout age follows the state pension age and, for newly created schemes, is three years before.

Pension scheme payments five years before state pension age was possible until 2018, and prior to that there was a 60-year-old entitlement.

F&P stated there were good arguments for giving savers the opportunity to start receiving payouts from their pension scheme five years before the state pension age again.

“An adjustment of the pension rules will provide additional flexibility in retirement and ensure interaction with senior schemes – so-called ‘free choice schemes’ – in private collective agreements,” said Hansen.

“At the same time, the current system, where many Danes have pension plans with different payout ages, will become much simpler to understand – and advise on for the pension companies.

“All this supports the government's objective of encouraging seniors to spend longer in the labour market, because gradual retirement with their own money can take place earlier.”

Hansen emphasised that a higher degree of flexibility can easily be achieved without the risk that Danish people with retire earlier when the earliest retirement age is lowered.

"It is absolutely possible to release pensions responsibly,” he continued.

“The Danes who have retired in recent years have all had the opportunity to start paying out their savings at age 60.

“However, the vast majority have done so close to the state pension age, which is now 67. So everything indicates that greater flexibility will only give Danes the desire and opportunity to stay in jobs if they can.”

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