Act on Labour Market Supplementary Pension

Act on Labour Market Supplementary Pension

This act consolidates the Act on Labour Market Supplementary Pension, cf. Consolidation Act No. 1110 of 10 October 2014, with the amendments resulting from Section 9 of Act No. 1490 of 23 December 2014, Section 1 of Act No. 1569 of 15 December 2015, Section 11 of Act No. 395 of 2 May 2016, Section 3 of Act No. 626 of 8 June 2016, Section 10 of Act No. 1549 of 13 December 2016, Section 12 of Act No. 1547 of 19 December 2017, Section 2 of Act No. 442 of 8 May 2018, Section 15 of Act No. 706 of 8 June 2018, Section 13 of Act No. 1701 of 27 December 2018, Section 1 of Act No. 339 of 2 April 2019, Section 7 of Act No. 369 of 9 April 2019, Section 9 of Act No. 551 of 7 May 2019, Section 9 of Act No. 552 of 7 May 2019, Section 10 of Act No. 1374 of 13 December 2019, Section 3 of Act No. 1557 of 27 December 2019, Section 10 of Act No. 1559 of 27 December 2019, Section 14 of Act No. 1563 of 27 December 2019, Section 7 of Act No. 641 of 19 May 2020, Section 3 of Act No. 1223 of 21 August 2020, Section 4 of Act No. 2202 of 29 December 2020, Section 1, items 1-13 and 15-24 of Act No. 1159 of 8 June 2021, Section 15 of Act No. 2382 of 14 December 2021, Section 7 of Act No. 409 of 25 April 2023, Section 22 of Act No. 753 of 13 June 2023, Section 1 of Act No. 1538 of 12 December 2023 and Section 2 of Act No. 1562 of 12 December 2023.

The amendment resulting from Section 1, item 14, of Act No. 1159 of 8 June 2021 on amendment of the Act on Labour Market Supplementary Pension (Extension of the Board's right to propose regarding the tariff basis etc.) is not incorporated in this consolidation act, as the amendment was subsequently repealed, cf. Section 15, item 1, of Act No. 1538 of 12 December 2023 on amendment of the Act on Labour Market Supplementary Pension and various other laws (Joint collection of employer contributions, extended authorization to set rules on right of set-off, national special rules for processing of personal data etc.).

Chapter 1
Introduction

Section 1. With the aim of paying supplementary pensions to employees etc. in accordance with this Act, Labour Market Supplementary Pension (Arbejdsmarkedets Tillægspension) is established.

Subsection 2. Labour Market Supplementary Pension may additionally administer schemes and tasks assigned by other legislation.

Subsection 3. Labour Market Supplementary Pension and wholly or partially owned subsidiaries may conduct other business that lies in natural continuation of the task performance under subsections 1 and 2.

Chapter 2
Scope of Persons

Section 2. Members of Labour Market Supplementary Pension are, subject to Section 3,
a) employees who have reached the age of 16 and are employed in the country, or who are sent to another country for the Danish State, Danish companies and institutions, and on Danish ships, b) persons receiving availability wages or waiting wages in accordance with the Act on Civil Servants in the State, the Public School and the Church of Denmark or in accordance with the municipal civil service regulations or statutes, c) persons who have been dismissed and who receive wages during a notice period, and d) persons who have been referred to sheltered employment with remuneration in the form of wages in accordance with Section 103, subsection 1, of the Act on Social Service.

Subsection 2. Persons who as employees have been members of the supplementary pension scheme for a total of at least 3 years, and who have additionally paid contributions corresponding to 3 years' contributions in accordance with Section 15, may, upon their own request, retain their membership even if they transition to self-employment. The detailed rules regarding this are set by the Board of Labour Market Supplementary Pension.

Subsection 3. The Minister of Employment sets rules, after consultation with the interested employer and employee organizations, to ensure that groups of persons who typically have employment with several employers within a single week (casual workers) are covered by the scheme.

Section 2a. Members of an unemployment fund are covered by the scheme during unemployment if they are entitled to daily benefits in accordance with the Act on Unemployment Insurance etc. or Article 64 or 65 in EC Regulation No. 883/04 on the coordination of social security schemes. Furthermore, members of an unemployment fund receiving temporary labour market benefits under Chapter 9b of the Act on Unemployment Insurance etc. are covered.

Subsection 2. Employees are covered by the scheme during absence from work if they are entitled to daily benefits in accordance with the Act on Sickness Benefits or the Act on Right to Leave and Daily Benefits for Maternity. The same applies to unemployed persons who would be covered by subsection 1 if the condition entitling them to daily benefits had not existed.

Subsection 3. Employees in employment are covered by the scheme during participation in education that entitles to reimbursement in accordance with the Act on Reimbursement and Subsidies for Participation in Vocational Adult and Further Education, if they receive wages from an employer or receive reimbursement.

Subsection 4. Employees who receive subsidies from the municipality during employment in flexible jobs, cf. Sections 123-125 of the Act on Active Employment Measures, are covered by the scheme.

Subsection 5. Persons receiving benefits in accordance with Sections 23, 25, 68, 69j, 71 and 74a of the Act on Active Social Policy and Sections 59, 87 and 88 of the Child Act are covered by the scheme.

Subsection 6. Persons receiving pensions in accordance with Sections 16, 26a or 26g of the Act on Social Pensions are covered by the scheme.

Section 2b. The following persons may, upon their own request, pay contributions to Labour Market Supplementary Pension for periods where they receive the mentioned benefits:
1) Persons who are members of an unemployment fund and receive transition benefits or early retirement benefits in accordance with the Act on Unemployment Insurance etc.,
2) persons who receive flexible benefits in accordance with the Act on Flexible Benefits,
3) persons who, pursuant to Section 74o of the Act on Unemployment Insurance etc., receive early retirement benefits without being members of a Danish unemployment fund, and
4) persons covered by the Act on Partial Pensions.

Section 2c. The detailed rules on contribution obligations according to the provisions in Section 2a and Section 2b are set by the Minister of Employment and upon proposal from the Board of Labour Market Supplementary Pension, subject to subsection 2.

Subsection 2. The detailed rules on contribution obligations for benefits under Sections 59, 87 and 88 of the Child Act, cf. Section 2a, subsection 5, are set pursuant to Section 59, subsection 4, Section 87, subsection 4, and Section 88, subsection 6, of the Child Act.

Section 3. The Minister of Employment sets rules, after consultation with the Board of Labour Market Supplementary Pension, regarding whether the following groups shall be covered by the Act:
a) foreign employees who are temporarily employed in the country, b) foreign employees who, during long-term employment in the country for foreign companies, are covered by a pension scheme in their home country, c) foreign employees employed at Danish diplomatic representations abroad or on Danish ships, and d) Danish employees who are employed abroad by Danish companies and are covered by a pension scheme applicable there.

Subsection 2. The Minister of Employment may deviate from the Act's provisions on membership of Labour Market Supplementary Pension and on contributions as far as concerns citizens of other states or parts thereof and Danish citizens residing in other states or parts thereof, provided that mutual agreements regarding these persons' access to supplementary pension have been reached with the relevant states.

Section 4. (Repealed)

Chapter 2a
(Repealed)

Chapter 3
Own Pension

Section 5. (Repealed)

Section 6. For members who entered the scheme no later than 31 March 1965, annual supplementary pension is paid based on seniority acquired before 1 January 1982, however maximum 17¾ years, cf. Section 7, according to the following scale:

Born in | Annual pension per year of seniority --- | --- April 1898 | 600.00 DKK

• 1899 | 312.00 DKK
• 1900 | 216.00 DKK
• 1901 | 168.00 DKK
• 1902 | 139.20 DKK
• 1903 | 120.00 DKK
• 1904 | 111.43 DKK
• 1905 | 105.00 DKK
  October 1905 – April 1917 | 108.00 DKK
  April 1918 | 109.71 DKK
• 1919 | 111.82 DKK
• 1920 | 113.74 DKK
• 1921 | 115.50 DKK
• 1922 | 117.12 DKK
• 1923 | 118.62 DKK
• 1924 | 120.00 DKK
• 1925 | 119.14 DKK
• 1926 | 118.34 DKK
• 1927 | 117.60 DKK
• 1928 | 116.90 DKK
• 1929 | 116.25 DKK
• 1930 | 115.64 DKK
• 1931 | 115.06 DKK
• 1932 | 114.51 DKK
• 1933 | 111.33 DKK
• 1934 | 108.32 DKK
• 1935 | 105.47 DKK
• 1936 | 102.77 DKK
• 1937 and later | 100.20 DKK

Subsection 2. For members who entered the scheme on 1 April 1965 or later, supplementary pension is paid at 60 DKK per year for each year of seniority, cf. Section 7, acquired before 1 October 1972, and at 100 DKK per year for each year of seniority acquired from 1 October 1972 to 31 December 1981. A maximum of seniority corresponding to the time from entry to 1 January 1982 can be obtained in total.

Section 7. For the period before 1 January 1982, one year of seniority corresponds to payment of contributions during the year, cf. Section 15, for 11 months before the 60th birthday and 9 months after this point.

Subsection 2. Contribution payments in a specific year exceeding those mentioned in subsection 1 are credited to the member in other contribution years to the extent necessary to obtain seniority as specified in subsection 1, or to obtain pension as specified in Section 8, subsection 2. Any excess contributions are deemed paid in the period from 1 July 1992 to 1 January 2002.

Subsection 3. Weeks or months for which 2/3 or 1/3 contribution has been paid pursuant to Section 15 are counted proportionally.

Section 8. For contributions relating to the period from 1 January 1982 to 1 July 1992, an annual pension of 100 DKK is paid for each contribution amount of 396 DKK paid before the 60th birthday, and 100 DKK for each contribution amount of 324 DKK paid after this point.

Subsection 2. In the period mentioned in subsection 1, a maximum pension corresponding to 11 months' contributions per year before the 60th birthday and 9 months' contributions per year after this point can be obtained. Any excess contributions are credited according to corresponding rules as in Section 7, subsection 2.

Section 8a. For contributions relating to the period from 1 July 1992 to 1 January 2002, an annual pension of 100 DKK is paid for each contributed contribution amount of 396 DKK.

Section 8b. For contributions relating to the period from 1 January 2002 to 1 January 2008, with deduction of amounts according to Section 16, pension is paid as specified in Appendix A. The pension is determined based on an interest rate of 2% p.a.

Section 8c. Contributions relating to the period from 1 January 2008, with deduction of amounts according to Section 16, are divided into a guarantee contribution and a bonus contribution. Members acquire pension from guarantee contributions in accordance with the tariffs set once a year for the following year.

Subsection 2. The Minister of Employment sets, upon proposal from the Board of Labour Market Supplementary Pension, detailed rules on the principles for setting the annual tariffs, cf. subsection 1. The Minister of Employment sets the tariffs upon proposal from the Board of Labour Market Supplementary Pension. The proposed annual tariff is determined based on a market-value-based accrual interest rate set by the Board of Labour Market Supplementary Pension in accordance with the pension basis, cf. Section 18, unless the Minister of Employment, upon proposal from the Board of Labour Market Supplementary Pension, sets a tariff that is guaranteed solely regarding longevity risk, however maximum for one quarter of the guarantee contribution in subsection 1.

Subsection 3. The Minister of Employment sets, upon proposal from the Board of Labour Market Supplementary Pension and after consultation with the Danish Financial Supervisory Authority, the maximum guarantee contribution's share of an annual contribution and rules on the principles for setting the actually used annual guarantee contribution. The Minister of Employment sets, upon request from the Board of Labour Market Supplementary Pension, the size of the actually used guarantee contribution.

Section 9. Supplementary pension in the form of own pension is paid monthly in advance from the 1st of the month after reaching the state pension age, subject to Section 9a, subsection 2. If a request for deferral of pension payment is made, the pension is regulated according to the rules in Section 9a. The Board of Labour Market Supplementary Pension may, however, determine that smaller pension amounts with addition of bonus pension are paid either for longer periods at a time or as capitalized lump sums. The Board of Labour Market Supplementary Pension sets rules on capitalization values, cf. Section 18. In the capitalization, the same expected remaining lifetime is used for men and women.

Subsection 2. The calculated annual pension with addition of bonus pension is rounded to the nearest amount divisible by 12.

Subsection 3. For the period before payment has begun, a maximum of 6 months' supplementary pension may be paid.

Subsection 4. Supplementary pension, cf. subsection 1, to members residing abroad is paid upon request.

Subsection 5. The Minister of Employment sets, upon proposal from the Board of Labour Market Supplementary Pension, rules on conversion of pension promises upon change of state pension age, cf. the Act on Social Pensions.

Section 9a. Payment of the supplementary pension may be deferred calculated from the state pension age. The payment may not be deferred for more than 10 years calculated from the 1st of the month after the member has reached the state pension age. The supplementary pension is increased for each month the payment is deferred. The increased pension is acquired in accordance with the tariffs set once a year for the following year by the Minister of Employment upon proposal from the Board of Labour Market Supplementary Pension. The proposed annual tariffs are set in accordance with Section 8c, subsection 2.

Subsection 2. The Board of Labour Market Supplementary Pension may, however, determine that pensions that would give rise to a capitalized lump sum, cf. Section 9, subsection 1, 3rd sentence, are paid upon reaching the state pension age.

Section 10. The Minister of Employment may, upon proposal from the Board of Labour Market Supplementary Pension, set rules on calculation and payment of supplementary pension.

Chapter 4
Benefits upon Death (ATP contributions relating to the period before 1 January 2002)

Spousal Benefit

Section 11. For surviving spouses of members of the supplementary pension scheme who were born on or after 1 July 1925 and who die on or after 1 July 1992, a lump sum is paid upon death. The right to the lump sum is not affected by separation between the spouses having taken place.

Subsection 2. The amount corresponds to the capitalized value of a pension benefit that is calculated to be paid to a person of the same age as the deceased member. The pension benefit is further assumed to be paid for life from the date of death, however earliest from the person's 67th year. If the deceased had begun pension payment before the 67th year, cf. Section 9, subsection 1, the pension benefit is assumed to be paid from the date of death. In the capitalization, the same expected remaining lifetime is used for men and women.

Subsection 3. The pension benefit, cf. subsection 2, amounts to 35% of the own pension and bonus pension that the member in question has acquired the right to upon death.

Child Benefit

Section 11a. For children of members of the supplementary pension scheme who were born on or after 1 July 1925 and who die on or after 1 July 1992, a lump sum is paid upon death.

Subsection 2. The amount amounts to once for each child under 18 years the pension right in the form of own pension and bonus pension from the 67th year, possibly regulated according to Section 9, subsection 1, if the deceased had begun pension payment before the 67th year or deferred pension payment to a time after the 67th year, cf. Section 9a, as the member had acquired the right to upon death.

Subsection 3. The amount mentioned in subsection 2 is paid to the guardian of the or the entitled children.

Transition Benefit

Section 12. In addition to the amount according to Section 11, a lump sum is paid to surviving spouses of members of the supplementary pension scheme born in the period 1 July 1925 - 30 June 1941, who die on or after 1 July 1992.

Subsection 2. The amount corresponds to the capitalized value of a pension benefit to the surviving spouse. In the calculation, it is assumed that the pension benefit is paid from the date of death, however earliest from the survivor's 62nd year. In the capitalization, the same expected remaining lifetime is used for men and women, cf. subsection 4.

Subsection 3. The pension benefit, cf. subsection 2, after a member born no later than 30 June 1931, amounts to 15% of the own pension and bonus pension that the member in question had acquired the right to on 1 July 1992. For members born in the period 1 July 1931 - 30 June 1941, the percentage is tapered evenly, so that for members born on or after 1 July 1941, no pension benefit is calculated.

Subsection 4. In the capitalization, from the surviving spouse's 67th year or from the time where the person has begun pension payment before the 67th year, cf. Section 9, subsection 1, only that part of the pension benefit after subsection 3 is counted, which together with the pension benefit after Section 11, subsection 3, exceeds the survivor's own pension (including bonus pension), cf. Chapter 3. If the survivor is not 67 years old at the time of death, contributions relating to the period until 1 January 2002 are counted in the calculation of own pension.

Capitalized Spousal Pension etc.

Section 13. For surviving spouses of members of the supplementary pension scheme who were born no later than 30 June 1925 and who die on or after 1 July 1992, a lump sum is paid upon death, cf. subsection 3.

Subsection 2. For surviving spouses who were born on or after 1 July 1930, after members who died before 1 July 1992, a lump sum is paid, cf. subsection 3.

Subsection 3. The lump sums after subsections 1 and 2 are calculated as the capitalized value of a pension benefit to the surviving spouse, which corresponds to either half of the deceased's own pension and bonus pension or half of the own pension and bonus pension that the deceased would be entitled to receive from their 67th birthday based on the contributed contributions and bonus accrual.

Subsection 4. In the capitalization, it is assumed that the pension benefit is paid from the date of death, however earliest from the surviving spouse's 62nd year, cf. subsection 5. In the capitalization, the same expected remaining lifetime is used for men and women.

Subsection 5. In the capitalization, from the surviving spouse's 67th year or from the time where the person has begun pension payment before the 67th year, cf. Section 9, subsection 1, only that part of the pension benefit, cf. subsection 3, is counted, which exceeds the spouse's own pension (including bonus pension), cf. Chapter 3. If the surviving spouse is not 67 years old at the time of death, contributions relating to the period until 1 January 2002 are counted in the calculation of own pension.

Subsection 6. The lump sums after subsections 1 and 2 are paid on the condition that the marriage has lasted for 10 years, and that the deceased has acquired the right to full pension, cf. Sections 6, 7 and 8, for a total of 10 years.

Subsection 7. Application for lump sum after subsection 2 must be submitted no later than at the surviving spouse's 67th year, but not earlier than 1 January 2007.

Section 14. Where the right to payment of spousal pension and bonus pension was acquired before 1 July 1992, the pension is paid according to the previously applicable rules. The right is forfeited upon entering into a new marriage, but re-enters upon request if the marriage ends.

Subsection 2. If the surviving spouse simultaneously fulfills the conditions for receiving supplementary pension in the form of own pension in accordance with Chapter 3, the person only has the right to the largest of the pensions.

Subsection 3. The spousal pension is otherwise paid in accordance with the rules in Section 9, subsection 1.

Section 14a. Labour Market Supplementary Pension pays lump sums according to Sections 11-13 when ATP receives notification of death from the Civil Registration System. If the member resided abroad at the time of death, or if the entitled person for the death benefit resides abroad, payment is made upon request from the entitled person.

Subsection 2. The Minister of Employment may, upon proposal from the Board of Labour Market Supplementary Pension, set rules for calculation and payment of lump sums according to Sections 11, 11a, 12 and 13 as well as calculation of own pension according to Section 12, subsection 4, and Section 13, subsection 5. The Board sets rules for determination of capitalization values, cf. Section 18.

Chapter 4a
Benefits upon Death (ATP contributions relating to the period from 1 January 2002)

Benefits to Spouses and Cohabitants

Section 14b. For surviving spouses or cohabitants of members of the supplementary pension scheme, a lump sum is paid upon the member's death, which is determined by the Board of Labour Market Supplementary Pension. The right to the lump sum for spouses is not affected by separation between the spouses.

Subsection 2. Persons are considered cohabiting if they have a common residence and can enter into marriage with each other. To acquire the right to a benefit after subsection 1, the cohabitants must have inserted each other as recipients of this benefit in a written note with Labour Market Supplementary Pension. The cohabitation, cf. 1st sentence, must exist at the time of the note with Labour Market Supplementary Pension. It is furthermore a condition that the cohabitation has existed for at least 2 years prior to the death. In the case of the cohabitant's institutional stay, the requirement of common residence in the 4th sentence must have been fulfilled prior to the stay.

Subsection 3. A surviving cohabitant who fulfills the conditions in subsection 2 except for the condition of note in subsection 2, 2nd sentence, may request to have the lump sum in subsection 1 paid, if the conditions for being noted as a cohabitant after subsection 2 were fulfilled at the time of death.

Subsection 4. Benefit after subsection 1 may be paid to a survivor after a member who has been a member of the supplementary pension scheme for a total of at least 2 years, and who has additionally paid contributions corresponding to 2 years' contributions in accordance with Section 15.

Section 14c. The benefit after Section 14b, subsection 1, is reduced by equal amounts once every year, the first time on the 1st of the month, 12 months after the member reaches the state pension age, cf. Section 1a in the Act on Social Pensions. The benefit is completely forfeited on the 1st of the month, 5 years after the member has reached the state pension age.

Section 14d. Spouses of members of the supplementary pension scheme who have the right to an amount according to Sections 11 and 12 and simultaneously have the right to an amount according to Section 14b, only have the right to have the highest of these amounts paid.

Child Benefit

Section 14e. For children of members of the supplementary pension scheme, a lump sum is paid for each child under 21 years upon death. The amount is determined by the Board of Labour Market Supplementary Pension.

Subsection 2. For children under 18 years, the amount is paid to the guardian of the or the entitled children.

Subsection 3. Benefit after subsection 1 may be paid to children of members who have been members of the supplementary pension scheme for a total of at least 2 years, and who have additionally paid contributions corresponding to 2 years' contributions in accordance with Section 15.

Section 14f. Children of members of the supplementary pension scheme who have the right to an amount according to Section 11a and simultaneously have the right to an amount according to Section 14e, only have the right to have the highest of these amounts paid.

Section 14g. Labour Market Supplementary Pension pays lump sums according to Sections 14b and 14e when ATP receives notification of death from the Civil Registration System. If the member resided abroad at the time of death, or if the entitled person for the death benefit resides abroad, payment is made upon request from the entitled person.

Subsection 2. The Minister of Employment may, upon proposal from the Board of Labour Market Supplementary Pension, set rules for calculation and payment of lump sums according to Sections 14b and 14e as well as calculation of own pension according to Section 14e, subsection 2. The Board sets rules for determination of capitalization values, cf. Section 18.