Early retirement is popular among trade union members

A new survey of its membership by Denmark's FTF trade union confederation shows that early retirement is popular among trade union members and gives a pointer as to why this is so.

Denmark's second largest trade union confederation in Denmark, the Confederation of Salaried Employees and Civil Servants (Funktionærernes og Tjenestemændenes Fællesråd, FTF), with 408,000 members, has recently conducted a membership survey on retirement.

Of employees who are in the 56-59 age group and thus close to the retirement age, 60% wish to take early retirement at the age of 60. The reasons were examined and the survey showed that: a large proportion of the respondents had family and leisure considerations; 30% named ill health as the reason; 17% said they could no longer keep up with the work; and 8% stated that they lacked the necessary skills.

The survey indicates that economic incentives and reduced working time could persuade a large proportion of this group to postpone retirement. One quarter of respondents would postpone retirement if their pension were to be considerably enhanced, 33% could be persuaded to postpone retirement if there were a reduction of working time, and 28% would postpone early retirement if their health allowed it. However, 22% would not be persuaded by any means.

Within this age group, over half of those who had now retired did so voluntarily, while for the rest the cause of retirement was a combination of forced and voluntary retirement. Of those in this age group who were still employed, partial early retirement held an attraction for them if there was an offer of part-time work supplemented by public allowances.

For the 60-66 age group, two-thirds said that economic considerations are the main reason for still being employed. Almost the same number, and especially those who held a senior position, cited the positive challenge of their work as a main reason for staying on.

The average age of retirement for members of FTF is approximately 61, which is the overall average for the entire labour market. Some 65% retire at 60 and 95% before the age of 63. Among members of FTF who are 60, only 12% expect to work beyond 63.

All those in the 60-66 age group with 20 years' membership of an unemployment insurance scheme are entitled to early retirement benefit (DK9706114F). Employees of 60 years of age are entitled to maximum benefit of DKK 2,625 per week for the first 2.5 years, and 82% of the maximum benefit thereafter until they receive their normal pension at 67. In order to make the scheme more attractive, a person aged 63 who is still entitled to unemployment benefit will receive the maximum benefit until he or she reaches 67.

Since the original introduction of early retirement schemes some 20 years ago, the number of employees aged 60-66 taking early retirement has more than tripled, from about 40,000 in 1980 to 127,000 in February 1997, equal to more than two-thirds of the entire age group. In 1976, more than 75% of all men remained in the labour force until they were 65; today only 28% stay on until they become entitled to a pension at 67. Over the course of the last 20 years, the average age of those taking early retirement has fallen from 63 to 60. The Ministry of Finance estimates that there will be 160,000 recipients of early retirement benefits by 2005, whereas the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) estimates that this figure will double to some 260,000 people.