Early retirement once again on the agenda

With new statistics showing that seven out of 10 Danes aged between 60 and 67 have taken early retirement, in summer 1998 employers once more called on the government to amend the early retirement scheme.

Denmark's early retirement scheme is becoming increasingly popular. In 1997, 30,300 people took early retirement, bringing the overall total at the end of 1997 to some 136,000 - seven out of 10 of the population aged 60-67 years. With a 7% yearly increase, the number of people on early retirement will reach some 200,000 persons in 10 years' time (DK9710136N).

A decreasing number of new labour market entrants, an emerging labour shortage (unemployment is forecast at 180,000 persons, equal to 6.2% of the labour force, in 1999), and the fact that more than half of those who chose early retirement in 1997 left a job, have in summer 1998 caused employers once again to call on the government to alter the early retirement scheme (DK9706114F). The Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) proposes eliminating the "200 hours rule" which makes it possible for people on early retirement to work 200 hours per year without reduction in their allowances.

The Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) argues that employers should be better at motivating older employees to remain in the labour market. By improving companies' personnel policies with regard to older employees, LO believes that it will be possible to diminish the proportion (21%) of the total who take up early retirement involuntarily .

The Minister of Labour, Ove Hygum, is prepared to have tripartite talks with the social partners on the 200 hours rule and the need for better personnel policies. As a new initiative, Mr Hygum is prepared to issue a written guarantee to all persons aged 60, ensuring that those who remain in the labour market after this age do not lose their right to early retirement. Surveys show that the more the early retirement scheme is debated, the more people fear changes and therefore take early retirement. The guarantee is the Government's attempt to diminish this effect and ensure that more older employees stay for another year or two at the labour market. A survey conducted by Greens Analyseinstitut in February 1997 showed that a vast majority of respondents (71%) expected that changes would be made to the existing early retirement scheme.