Under the international pension scheme, Aalborg University will transfer a monthly pension contribution to the relevant pension fund. The pension contribution is calculated as 17.1% of your base salary and any pensionable supplements. 

Taxation of your prension contributions 

When the pension contribution is paid 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) your pension contribution will first be taxed 8 % as a labour market contribution. After the deduction of the labour market contribution, the remainder part of your pension contribution will be taxed 27%.

If you are under the ordinary taxation rules, the remainder of the pension contributions (after the deduction of the labour market contribution) will be taxed appropriately according to your taxation status as stated on your 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.

According to the Collective Agreement that covers all academic staff, Aalborg University (AAU) will transfer a monthly pension contribution to the relevant pension fund. The monthly pension contribution is calculated as 17.1% of your base salary and any pensionable supplements. 

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 be taxed on your pension contributions when they are transferred to your pension fund. Instead, tax will be deducted when your pension savings are paid out at retirement age. The taxation rate of your pension savings will depend on your tax situation and the prevailing pension tax legislation at that time.

Please note that 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%.

Insurance coverage

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 unexpected death.

The insurance cover in relation to the ordinary pension scheme is flexible and can be arranged to suit your personal situation.

For more information, please contact your pension fund. If you do not know which pension fund you belong to, please check your letter of employment.

It is possible for international academic staff members 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 as 17.1% of your base salary and any pensionable supplements, will be paid out together with your monthly salary. 

After deduction of the Danish state group life insurance premium, the amount equivalent to the pension contribution will be taxed according to your current income taxation status, whether you are covered by the researcher taxation scheme (flat tax 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 an academic staff member 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 of five years (six years, if agreed with your trade union representative and your department).

The pension exemption agreement cannot be retroactive.

Note that 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 or the international pension scheme, you will not benefit from the insurance coverage that comes with the ordinary or the international pension schemes. 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.

If you choose one scheme and want to amend your choice later, you must inform the relevant HR Service Centre. They will then register the change, which will take effect from the following month’s salary payment. Keep in mind that retroactive changes are not possible.

You can only change your pension scheme, if you 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

Aalborg University recommends that you seek personal counselling from your pension fund and from the Danish Tax Agency (Skattestyrelsen) regarding your pension taxation based on your specific, individual circumstances.

DisclaimerThe information about pension schemes on this page does not constitute and cannot replace individual legal counselling. Aalborg University (AAU) strives to ensure that the information about pension schemes provided here is correct, but takes no accountability for mistakes or deficiencies.