Annuity pension scheme

The maximum tax deductible amount of contributions to an annuity pension scheme is usually adjusted each year. The amount is DKK 63,100 in 2024. The limit includes all your contributions to annuity pension schemes and terminable annuities. If your annual amount of contributions exceeds this limit, Danica recommends that you supplement your annuity pension scheme with a life annuity. All contributions to a life annuity are tax deductible.

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.

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.

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.

You can start receiving your annuity pension benefits when you reach your pension payout age, and the payout period must be at least 10 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.

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

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 is DKK 63,100 in 2024.

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)