arbejdsmarkedspension

Arbejdmarkedspension is the Danish term for occupational pension schemes that operate within the Danish labor market. It comprises a collection of pension arrangements negotiated between trade unions and employers’ associations as part of collective agreements. The aim is to supplement the state pension and ATP (Arbejdsmarkeds Tillægspension) by providing additional income in retirement based on years of work and earnings.

The schemes are typically funded by contributions from both employers and employees and are managed by private pension funds or life insurance companies. They can take the form of defined benefit plans, where benefits are set by a formula, or defined contribution plans, where benefits depend on contributions and investment returns. Governance and supervision are provided by Danish financial regulation authorities, with rules that cover funding, investment, and member rights.

Payouts from arbejdmarkedspension can be taken as lifetime pensions, with options for lump-sum withdrawals or phased retirement, and many schemes also provide disability and survivor benefits. The exact entitlements depend on the specific scheme or sector, meaning that benefits can vary between industries and employers.

Tax treatment in Denmark generally allows pension contributions to reduce taxable income, while pension withdrawals are typically taxed as regular income. The labour market pension system is designed to work alongside the state pension and ATP to ensure a more substantial income in retirement for participants across different sectors.