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World News

Thousands of Danes could retire early under government pension reform

FILE PHOTO: Denmark's Prime Minister Mette Frederiksen leaves after the second day of a European Union leaders summit, held to discuss the EU's long-term budget for 2021-2027, in Brussels, Belgium, February 21, 2020. REUTERS/Francois Lenoir/File Photo

COPENHAGEN (Reuters) - Nearly 40,000 Danes could get the right to retire early under proposals set out by the government on Tuesday in fulfilment of a key manifesto pledge in last year’s parliamentary elections.

The government said it was seeking to address imbalances brought about by pension reforms started in 2006 that increased the retirement age to 67, promising to pay for the reform by higher taxes on banks, wealthy individuals and others.

The right to early retirement would apply to people aged 61 or more who have spent between 42 and 44 years in the labour market - a category the government expects to include about 38,000 people by 2022.

“We are addressing great injustice on our labour market,” Prime Minister Mette Frederiksen told a press conference.

The minority government still needs to negotiate with other political parties on the reform which would cost 3 billion Danish crowns ($480 million) a year.

Half of that bill would be financed by extra taxes on the financial sector and the other half by taxing property investors and rich individuals, the government has said, without giving any more details.

($1 = 6.2556 Danish crowns)

Reporting by Jacob Gronholt-Pedersen; Editing by David Holmes

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