The section covers

• Rule
• Description of plans under the Special Pension Savings Scheme (SP)
• Description of plans under the Labour Market Supplementary Pension Scheme for Recipients of Anticipatory Pension (SAP)
• Description of plans under capital pension funds

Rule

For plans under the Special Pension Savings Scheme (SP), the Labour Market Supplementary Pension Scheme for Recipients of Anticipatory Pension (SAP) and capital pension funds, the basis of taxation is determined as the difference between the value of the balance at the end of the year of taxation plus disbursements made during the year, and the value of the balance at the beginning of the year of taxation plus contributions made during the year.

The Temporary Pension Savings Scheme (Den Midlertidige Pensionsopsparing (DMP)) was introduced in 1998. According to this, salary/wage earners and self-employed workers were required to pay 1 per cent of their income in pension savings contributions. The amount paid was credited to an account with the Labour Market Supplementary Pension Fund (ATP) and would be disbursed - including interest - when the individual reached the age of 65.

Subsequently, the Temporary Savings Scheme (DMP) was made permanent; however, with certain changes. The name of the pension scheme changed to the Special Pension Savings Scheme (SP).

The DMP scheme was thus combined with the SP scheme on 1 January 2003, and balances under the DMP scheme were transferred to the account holders' accounts under the SP scheme.

Capital pension funds are self-governing institutions which administer savings for pension purposes according to agreement between a salary/wage earner and his or her employer. All contributions to the fund are made by the employer.   The fund handles the joint administration of all the members' assets.  The capital pension fund must maintain an account for each member's share of the fund's assets. All contributions must be added to this account and, at the end of the year, a proportionate share of the fund's profit must be added to the account. The plan is thus a pure savings plan without any insurance element.

The Labour Market Supplementary Pension Scheme for Recipients of Anticipatory Pension (SAP) is a pure savings plan without any insurance element. SAP funds with ATP are administered together with the funds in SP.

Recipients of anticipatory pension who want to pay contributions to SAP can choose to pay contributions to a pension provider other than ATP. SAP accounts in ATP cannot be moved to other providers, and SAP accounts with other pension providers cannot be moved to ATP.

SAP funds which are administered by ATP are transferred to the ATP scheme when the account holder reaches the age of 65 and are converted into a lifelong ATP pension subject to tax under Section 6 of PAL. The pension plan holder is liable to pay tax on the increase in the account in the form of the fund's etc. distributed profit. During the contribution period, SAP is not covered by Section 4 of PAL, but by Section 5 of PAL.

The Labour Market Supplementary Pension Scheme for Recipients of Anticipatory Pension (SAP) is a pure savings plan without any insurance element. SAP funds with ATP are administered together with the funds in SP.

Recipients of anticipatory pension who want to pay contributions to SAP can choose to pay contributions to a pension provider other than ATP. SAP accounts in ATP cannot be moved to other providers, and SAP accounts with other pension providers cannot be moved to ATP.

SAP funds which are administered by ATP are transferred to the ATP scheme when the account holder reaches the age of 65 and are converted into a lifelong ATP pension subject to tax under Section 6 of PAL. The pension plan holder is liable to pay tax on the increase in the account in the form of the fund's etc. distributed profit. During the contribution period, SAP is not covered by Section 4 of PAL, but by Section 5 of PAL.

Act no. 421 of 24 June 2003 laid down that account holders under the SP scheme have the right to move their balances, including interest, to another pension plan. The SP scheme was thus individualised.

Capital pension funds are self-governing institutions which administer savings for pension purposes according to agreement between a salary/wage earner and his or her employer. All contributions to the fund are made by the employer.   The fund handles the joint administration of all the members' assets.   The capital pension fund must maintain an account for each member's share of the fund's assets. All contributions must be added to this account and, at the end of the year, a proportionate share of the fund's profit must be added to the account. The plan is thus a pure savings plan without any insurance element.