Three pension scheme options
As an international researcher employed at Aalborg University, you have different options regarding your pension scheme.
It is advisable that you consider which pension scheme you prefer prior to your employment. You state your choice in the employment form, which you will be requested to fill in upon being offered a job at Aalborg University.
Please note that there are certain requirements you must meet in order to be eligible for the different pension schemes. Please also keep in mind that if you choose one scheme and want to alter your choice at a later time, it is not possible to change it retrospectively.
1. Ordinary pension scheme
According to the collective agreement that covers all academic staff, Aalborg University will transfer a monthly pension contribution to the relevant pension fund calculated as 17.1% of the base salary plus pensionable supplements. For PhD fellows, the monthly contribution to the relevant pension fund will be calculated as 17.1% of 85% of your basic salary.
Taxation of your pension contributions
In Denmark, pension contributions are exempt from taxation when they are paid into the pension fund. This means that you will not need to pay tax on pension contributions transferred to your pension fund. Instead, tax will be deducted when you request your pension savings to be paid out.
If you choose to take out your pension savings when your employment ends or when you leave Denmark, the current taxation rate and administration fee is approximately 60%. If you choose to take out your pension savings when you reach the age of retirement, the taxation rate will depend on your tax situation and the prevailing pension tax legislation at that time.
You will find that your pension scheme is a way of saving capital for your future as well as an insurance policy that comes into effect from the first day of your employment. The insurance coverage consists of:
1) Disability insurance which will provide you with financial security should you lose your ability to work.
2) Partner/children’s pension which will provide your family with financial security in the event of your untimely death.
The insurance cover in relation to the ordinary pension contribution is flexible and can be arranged to match your personal situation.
For more information, please contact your pension fund.
2. International Pension Scheme
Under the international pension scheme, Aalborg University will transfer a monthly pension contribution to the relevant pension fund, calculated as 17.1% of your base salary plus pensionable supplements. For PhD fellows, the monthly contribution to the relevant pension fund is calculated as of 17.1% of 85% of your basic salary.
Taxation of your pension contributions
When the pension contribution is made to your pension fund every month, it will be taxed immediately according to your current tax status. This means that every month you will pay tax on the monthly pension contribution.
If you are under the researcher taxation scheme (not applicable for PhD fellows) with a flat rate of 27% tax (plus 8% labour market contribution), your pension contribution will be taxed 32.84% every month. If you are not eligible for the researcher taxation scheme, you will be taxed according to the tax rate stated in your Danish tax card.
In return, there will be no tax charge when your pension savings are paid out at retirement, in contrast to the ordinary pension scheme.
Furthermore, if you leave Denmark and choose to have a cash pay-out of your pension savings before retirement, this payment will not be subject to government duties.
To be eligible for the international pension scheme
In order to be eligible for the international pension scheme you must be employed in accordance with the Collective Agreement concerning Academic Staff Employed by the State.
3. Pension exemption
It is possible for international researchers employed at Aalborg University to be exempt from paying pension contributions. However, certain requirements apply.
Pension exemption means that an amount equivalent to the pension contribution, calculated at 17.1 % of your base salary plus pensionable supplements, will be paid out together with your monthly salary. For PhD fellows, an amount equivalent to the pension calculated at 17.1 % of 85 % of your basic salary will be paid out together with your monthly salary.
After deduction of the Danish state group life insurance premium, this amount will be taxed according to your current income taxation status, whether you are covered by the researcher taxation scheme of a flat rate of 27 % (not eligible for PhD fellows) or taxed on the basis of an ordinary Danish tax card.
To be eligible for the pension exemption
In order to be eligible for pension exemption, you must meet the following requirements:
- Employment as a researcher, research assistant, PhD fellow, postdoc, assistant professor, associate professor or professor
- Non-Danish citizenship
- Fixed-term employment – maximum of five years
- Recruited from outside of Denmark or from another Danish university
Important information on pension exemption
If your employment as a researcher at Aalborg University is extended, or if you change your place of employment from Aalborg University to another Danish university, the pension exemption will remain in effect for a maximum total term of five years (six years if agreed with your trade union representative and your department).
The pension exemption agreement cannot be retroactive. This means that any pension contribution already made by Aalborg University to the relevant pension fund is irreversible.
International administrative staff members cannot opt to have their pension contribution paid out as salary.
Please be aware that if you choose pension exemption instead of the ordinary pension contributions, you will not benefit from the insurance coverage that comes with the ordinary pension scheme. It is therefore advisable that you consider taking up additional private insurance. You will only be covered by the mandatory group life insurance policy, which provides basic insurance in the event of critical illness or death.
You can find the pension scheme forms here.
If you have any questions, please contact the International Staff Unit at firstname.lastname@example.org.