Challenges to Implementation of Indexation of the Pension Age in Denmark

The proposed research investigates two linked challenges to implementation of indexation of the statutory retirement age. Currently for Danes who reach age 50, the lifetable risk of death before the statutory retirement age is almost 10% and the risk of death within 5 years afterward is about 7%1. That is, about one Dane in six dies after age 50 and less than five years after the retirement age. For some population groups in Denmark the risk is much higher8,9. We will identify the groups at highest risk. In addition, we will forecast how the risk of death before or within 5 years of the statutory retirement age will change as retirement is postponed to higher ages. The pace of progress in reducing mortality at older ages, especially after age 85, will (together with financial considerations that we will not consider) determine how much and how quickly the statutory retirement age will have to be increased to preserve the viability of the Danish welfare state. We will forecast progress in reducing mortality using the most advanced demographic methods. We will combine these two strands of research to assess when and by how much the statutory retirement age could increase to avoid increases in the risk of death before or just after retirement and simultaneously avoiding large increases in the population above the statutory retirement age.