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(Feb 03, 2011) On January 25, 2011, Denmark's Prime Minister Lars Løkke Rasmussen announced a plan to reform the country's early retirement program. The move has two goals: to help the economy and to prevent labor shortages. Economists have praised the plan but advise that it is not sufficient on its own to save the economy. (Early Retirement Reform Announced, COPENHAGEN POST (Jan. 25, 2011),

The current, general retirement age will go from 60 to 65, with some analysts predicting it will be up to 68 by 2030. (Denmark Proposes Raising Retirement from 60 to 65, AARP GLOBAL NETWORK (Jan. 26, 2011),

The reform will not have an impact on the existing early retirement plans for persons over 57, and the seriously ill will have a new early retirement program. Early retirement plans will be phased out gradually for those over 45 and eliminated right away for younger workers. Employees who wish to take out money they have already contributed to early retirement accounts will be subject to a tax on the withdrawals of 33.5%. They do have the option of transferring the money into a different retirement fund. (COPENHAGEN POST, supra.)

Rasmussen called for the reform the first week in January, describing the current early retirement plan, known as Efterlon, as too expensive for the nation. (Pension Reform on Danish Election Agenda, TVNZ (Jan. 2, 2011), He has stated, "[w]e can't borrow our way to welfare." Noting the plan's goal of avoiding labor shortages, he added, "before the recession we had a record low unemployment rate. We could pretty much gather all of the unemployed into the national stadium. That time is coming back." (COPENHAGEN POST, supra.)

Author: Constance Johnson More by this author
Topic: Employee benefits More on this topic
Jurisdiction: Denmark More about this jurisdiction

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Last updated: 02/03/2011