The Danish Parliament has passed the Act to implement the EU Portability Directive into Danish law. As a result, it will be easier for employees moving from Denmark to another EU/EEA country to leave their pension savings in Denmark as dormant funds.
The Danish Parliament has adopted the Act to implement Directive 2014/50/EU of the European Parliament and of the Council, which is intended to enhance worker mobility by improving the acquisition and preservation of supplementary pension rights when moving from Denmark to another EU/EEA country. The relevant statutory amendments affect the Danish Financial Business Act and the Supervision of Company Pension Funds Act.
The amendments will make it possible for employees moving out of Denmark to another EU/EEA country to leave their pension savings in Denmark as dormant funds. In future, pension companies will not be allowed to refuse holding the pension savings of outgoing employees. Life insurance companies may pay out the pension funds only if they do not exceed a threshold of DKK 20,000 ( EUR 2,700), which will be adjusted according to section 20 of the Danish Personal Tax Act, and only if consent has been obtained from the employee.
With this amendment, employees moving to Denmark from another EU/EEA country will not be faced with unnecessary entry barriers when they wish to join a Danish pension scheme. In future, such employees must as a minimum obtain unconditional scheme membership after 3 years and the minimum age for joining the scheme must not exceed 21 years.
The provisions will enter into force on 21 May 2018.
The content of the above is not, and should not be a substitute for legal advice.