Insurance and Pension Denmark (I&P Denmark) has warned of the impact of a more lenient state pension age indexation policy on occupational pensions.

The Social Democrats in Denmark have proposed introducing a more lenient indexation of Danes' state pension age, by ending the automatic indexation of the state pension age once it reaches 70.

I&P Denmark has warned, however, that a more lenient indexation of the retirement age in the future will place even greater demands on other pension savings. The association has said that if politicians do ease state pension age indexation, then they will also need to strengthen the incentive for Danes to save more for their own pension.

“If a political majority can find sufficiently solid financial scope to finance a relaxed indexation of the state pension age, then it is of course a possible political priority. However, if many Danes get more years of retirement, it will also place even greater demands on Danes to have solid pension savings,” I&P Denmark CEO, Kent Damsgaard, explained.

He added that recent debate has centred on whether certain groups of young people are saving too much for retirement in anticipation of the increasing state pension age.

“On the contrary, if the proposal for a relaxed indexation becomes a reality, there will be a need to simultaneously politically support the fact that Danes save more because they have the prospect of more years as pensioners,” Damsgaard argued.

“Pensions mean a lot both for the economy and for the individual citizen's security and life. Therefore, it is important that there are thorough discussions and a balance of the many balances and considerations. We look forward to the further debate on how to find the best possible interaction between the state pension and our labour market pensions,” Damsgaard concluded.

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