PM: phase out early retirement

Country can no longer afford to let people retire people five years early, PM says in annual address The nation’s early retirement scheme is a drain on the social welfare system, according to Prime Minister Lars Løkke Rasmussen. Addressing Danes...

The nation’s early retirement scheme is a drain on the social welfare system, according to Prime Minister Lars Løkke Rasmussen.

Addressing Danes in his second New Year’s Day speech, and his final one before next year’s general election, Rasmussen promised to gradually eliminate the ‘efterløn’ programme.

According to the PM, the programme costs 16 billion kroner annually – equivalent to the cost of educating 200,000 children. Other estimates have placed the amount higher.

“If we passively look on as this development continues, we will gradually be pulled in the direction of an unhealthy economy, growing debt, higher interest rates and lost jobs. We would need to make cuts to core social services. In hospital spending in schools. That’s not something I want.”

Phasing out the scheme, and eliminating it entirely for anyone currently under 45 would, according to Rasmussen, also help secure enough hands for the workforce in the years to come.

“Only half of Danes work. In the years to come, there will be even fewer. For every five people that retire, there are only four people to take their place. There are just too few of us to pull the load.”

The early retirement programme permits individuals who have paid into the system for 30 years to receive a partial pension for five years before the official retirement age, currently 65.

Introduced in 1979 as a way to provide older manual labourers a way to stop working, as well as to help alleviate unemployment, the programme has been a sacred cow of Danish politics. As recently as 2006, the government pledged not to eliminate the programme.

The Copenhagen Post

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