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Annuity pension scheme

An annuity pension scheme gives you the financial freedom to maintain your standard of living, even though your active working life has ended. You will receive a fixed monthly amount of benefits for a period of up to 30 years. Annuity pension benefits can also be a supplement to a life annuity, for example, and your state retirement pension benefits.

An annuity pension scheme is an attractive savings option that can help you maintain your standard of living, even though you are no longer working. You will get a fixed monthly amount of benefits from the date you retire and for a period of at least ten years.

Learn more about annuity pension (PDF) (In Danish only)

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Advantages of an annuity pension scheme

  • An annuity pension scheme gives you a fixed monthly amount of benefits for a period of ten to 30 years.
  • Contributions are deductible against your personal income tax – also against top-bracket tax.
  • You pay a favourable pension returns tax rate of 15.3% per year on the return on your annuity pension scheme.
  • You have savings balance protection, meaning that your beneficiaries will receive your savings if you die before you receive all your benefits.
  • You can take out an insurance cover giving you the right to waive contributions (waiver of contribution) if your earning capacity is reduced. This means that your pension savings will continue to grow without you having to make contributions yourself.

Facts

With an annuity pension scheme, you can set aside a considerable sum for your retirement while also providing financial security for your family through various insurance covers that will leave them financially secure if you die.

  • Contribution limit

    The maximum tax deductible amount of contributions to an annuity pension scheme is usually adjusted each year. The amount was DKK 58,500 in 2021. The limit includes all your contributions to annuity pension schemes and terminable annuities. If your annual amount of contributions exceeds this limit, Danica Pension recommends that you supplement your annuity pension scheme with a life annuity. All contributions to a life annuity are tax deductible.

  • Deductibility and tax

    Whether you make contributions to an annuity pension scheme through your employer or you do so yourself (personal scheme), your contributions are fully deductible against your personal income tax. Your benefits will be subject to income tax, but not to labour market contributions.

  • Protection of your savings if you die

    Your pension savings will be paid out to your surviving relatives if you die before all your benefits have been paid out. Through a designation of beneficiary, you decide who is to receive your savings. In an annuity pension scheme, the designated beneficiary is automatically your ‘next of kin’. ‘Next of kin’ is defined as, in the following order: spouse, cohabitant (as defined), heirs of the body (children, grandchildren), heirs by will, heirs by statute.

  • Waiver of contribution

    You can take out an insurance cover which means that you do not have to make contributions to your pension scheme yourself if your earning capacity is permanently or temporarily reduced to a certain level – due to illness or an accident. This means that your pension savings will continue to grow as if pension contributions were still being made.

  • Benefits paid out over a period of ten to 30 years

    You can start receiving your annuity pension benefits when you reach your pension payout age, and the payout period must be at least ten years. Benefit payments must end not later than 30 years after you reach your pension payout age. Please note that for pension schemes set up before 1 May 2007, the pension payout age may be 60 years. For pension schemes set up between 1 May 2007 and 31 December 2017, the pension payout age may be five years before your state pension age.

  • Prices and conditions

    Expenses on an annuity pension scheme depend on

    • how your savings are invested
    • the amount of contributions
    • whether your pension scheme includes insurance covers
    • whether you have a personal or a company pension scheme
    • whether your pension scheme is optional or chosen by your employer

    When and how much

    You can set up an annuity pension scheme from your 18th birthday and until 20 years after you reach your pension payout age. It is up to you how much you want to contribute per month. However, the maximum deductible amount was DKK 58,500 in 2021.

    You can start receiving your annuity pension benefits when you reach your pension payout age, and the payout period must be at least ten years. Benefit payments must end not later than 30 years after you reach your pension payout age. Your benefits will be subject to income tax, but not to labour market contributions.

    Click here to see the prices and conditions (In Danish only)

Retirement savings scheme

Have your savings paid out as a lump sum – or in smaller portions. It is up to you.

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Life annuity

A monthly income for the rest of your life, so that you know your money will not run out.

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All payout options

Are you the cautious type or do you chase the highest possible return? Whether you want to invest your savings yourself or prefer to leave it to our experts, we have a solution that suits your needs.

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A lot can happen in a year. Does your pension scheme fit your current life situation?