Guidelines

If you are a publicly employed member under a collective agreement, you can choose that your employer pays pension contributions to DIP. You can also be admitted as an individual member. As an individual member, the monthly pension contribution must as a minimum  amount to DKK 1,000.

Banking information

Sort code: 3100

Account no.: 409 3666

Swift: DABADKKK

IBAN: DK6030000004093666

Payment of pension contributions

The pension contribution is payable on the last weekday of the month. Payment can be made to DIP’s account no. 409 36 66, sort code 3100 or the Danish Payments System (PBS) no. 01043250.

 Memembership of DIP implies that pension contributions, single contributions etc. are subject to the rules on pension schemes with current payments, cf. the Danish Pension Taxation Act, chapter 1. The Pension Fund is subject to the Danish Insurance Act.

Pension contributions paid by an employer according to terms of employment must under section 19 of the Act not be included in the employee’s taxable income. In the Danish Pension Taxation Act there are no maximum amount allowed for the pension contributions. The rule of section 19 of the Act applies whether the employer contributes to the scheme or makes the entire pension contributions on behalf of the employee.

Questions related to payment of contributions can be addressed to Anette Denk on phone no. 8233 0031.

Payment of pension contributions for members with a non-Danish citizenship

Non-Danish citizens

Information about payment of pension contributions for non-Danish citizens when working in Denmark

As a member of DIP and as a non-Danish citizen you have the possibility of choosing a pension scheme under section 53A of the Danish Pension Tax Act. This means that your monthly pension contribution is included in your taxable income and taxed according to your taxation status. On the other hand, there is no tax charge if you withdraw your pension savings.  

As the pension contributions are made through your employer, there is no limit for the size of the monthly contribution.

Leaving Denmark

If you leave Denmark to work abroad, you can continue paying into your pension scheme in DIP. As you do not pay tax in Denmark, there is no limit for the size of the monthly contribution.

Contact us on 82 33 00 00 or dip@dip.dk for further information.

Taxation

Your employer deducts the pension contributions before calculation of tax and social security contributions, and you benefit from the tax advantage immediately. Consequently, you should not enter the payment on your tax return. DIP settles the social security contributions with the Central Tax Administration (SKAT). The paid contributions are not included in your taxable income.

Privately paid contributions
When you pay the pension contributions yourself, DIP reports the payments to SKAT. The reported payments appear from your tax return.

Payment to life annuities is fully deductible from your personal income when the payment period is 10 years or longer. If payment reduced within the first 10 years, other rules apply.

If the payment period less than 10 years or you pay single contributions, you can deduct up to DKK 48,200 (2016) each year until the payment is deducted in full.

General information
Payment to annuities certain is deductible from your personal income. In 2016, the maximum tax relief is DKK 52,400 after payment of social security contributions.

Payment to the group insurance is taxable and reported to SKAT.

An individual pension return tax of 15.3 % is paid annually. Deposit values saved before 1 January 1983 are tax-free with respect to pension return tax.

Payment
Your monthly pensions are taxed as personal income and are not subject to payment of social security contributions.

Payment of the retirement sum and endowment policies is subject to a 40 % tax charge. 

Payment of annuities certain, endowment policies and pension life cover upon death is subject to a 40 % tax charge, however, 0 % for § 53A schemes.

Payment from the group insurance is tax-free. 

Moreover, lump sum death payments are deducted a potential inheritance tax on payment to others than spouse, cohabitant or registered partner.

The pension return tax is adjusted annually at the end of December. The adjustment can impact the year’s pension payments and will appear from the February payment. Relating to § 53A schemes, capital gains, which are taxable, must be paid every year in February.

Payments to § 53A schemes are not deductible. 

Reporting to SKAT

DIP reports contributions and single contributions that you pay to SKAT (the Central Tax Administration). The reported amounts appear from your tax return. The same applies to the group insurance. In 2016, the group insurance costs DKK 133 monthly. Payment to the group insurance is taxable and is reported to SKAT.

The payment to your pension scheme is tax deductible, but different rules apply depending on who pays the contributions.

Your employer deducts the pension contributions before calculation of tax and social security contributions, and you benefit from the tax advantage immediately. Consequently, the payment should not be entered on your tax return. DIP settles the social security contributions with SKAT. The paid contributions are not included in your taxable income.

When you make the payments yourself

When you pay the pension contributions yourself, DIP reports the payments to SKAT. The reported payments appear from your tax return.

Payment to life annuities is fully deductible from your personal income when the payment period is 10 years or longer. If payment is reduced within the first 10 years, other rules apply.

If the payment period is less than 10 years or you pay single contributions, you can deduct up to DKK 48,200 (2016) each year until the payment is deducted in full.

Annuity certain

Payment to annuity certains is tax deductible in your personal income. In 2016, you may deduct a maximum of DKK 52,400.

Payment of contributions is discontinued

If the contribution payments are discontinued, you maintain your pension and insurance covers for the first three months that the pensions are discontinued. This is called the non-contributory period. The costs for maintaining your covers in the non-contributory period are deducted from your deposit. You can apply for having the non-contributory period prolonged.

Dormant membership

When the non-contributory period expires, you are transferred to dormant membership. As a dormant member the monthly administration costs account for DKK 30 monthly, and the pension covers are calculated on basis of your payments. The group insurance is terminated on transfer to dormant membership. However, this does not apply if you have reached age 60 when the contributions are discontinued.

 If you have reached age 65 or you are subject to a high savings pension scheme, you are transferred directly to dormant membership if payments are discontinued.

You can always resume the contribution payments. As a dormant member on Regulations 1 or 2 you are admitted on Regulations 4 if you resume payments. As a dormant member on Regulations 3 and 4 you are admitted on the same Regulations if you resume payments.

On resumption of contribution payments you become subject to a provision for the new contributions.

Paying contributions when living abroad

If you leave Denmark and you continue paying contributions yourself, you should be aware that there is no tax relief for the payments.

Retirement pension when living abroad

Even though you do not live in Denmark when it is time to receive your retirement pension, you must have a Danish bank account as DIP cannot make monthly payments to an account abroad.

Cash compensation for withdrawal

If you are not a Danish citizen, and you leave Denmark, you can choose to have your pension savings paid as a cash payment. However, a cash payment requires that you - at the time of payment - are neither employed nor have entered into any agreement about employment which will result in membership of a pension fund or a pension scheme containing an insurance element. This refers to Danish employment only. DIP charges a fee of DKK 1,000, and furthermore the payment is subject to a 60 % tax charge. The payment can be made at any time before you reach the retirement age.

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Cash compensation for withdrawal - § 53A scheme

If you leave Denmark, you can choose to have a cash payment of your savings. When your pension scheme is established under section 53A of the Danish Pension Tax Act, the payment is tax-free.

Contact us on 82 33 00 00 or internationalpension@dip.dk for further information.

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