LD Pensions is an independent institution established by law in 1980 as Dyrtidsfonden, with the aim of managing and disbursing funds from government payments comprising certain cost-of-living allowances. In 2018, LD Pensions was assigned the management of the Employees’ Holiday Allowance Fund with the aim of managing and disbursing funds from accrued holiday entitlements.
LD Pensions is governed by the Cost-of-Living Allowance Fund Act (the LD Act) and the Act on the Management and Administration of Accrued Holiday Allowance, as well as a number of executive orders. Taxation of LD Pensions’ assets is governed by general tax legislation. LD Pensions falls within the remit of the Ministry of Employment and is further regulated by the Danish Financial Supervisory Authority, which supervises LD Pensions’ compliance with financial regulations.
The two funds operate under the same legal entity and have the same management structure and business model. However, the funds are separate financial entities within LD Pensions as the legal entity. Dyrtidsfonden uses the secondary name LD Pensions.
The Cost-of-Living Allowance Fund
In the late 1970s, a political decision was taken to freeze two of the cost-of-living allowances that automatically helped to adjust employees’ wages in line with price rises and safeguard real wages. In total, two cost-of-living adjustments were frozen for employees who were in full-time employment during the period 1977–79.
The Employees’ Cost-of-Living Fund was established by law (the LD Act) in 1980 with the aim of managing and paying out frozen cost-of-living allowances.
The Holiday Allowance Fund
In January 2018, the Danish Parliament passed a new holiday law. A new Act, the “Act on the Management and Administration of Accrued Holiday Allowances”, was also enacted at the same time. Both Acts form the basis for the Employees' Holiday Allowance Fund.
The purpose of the Act on the Administration of the Employees' Holiday Allowance is both to secure employees’ entitlement to their accrued holiday allowance and to enable employers to retain such accrued holiday allowance until it becomes due for payment. To achieve this objective, it was decided to establish the Employees’ Fund for Accrued Holiday Allowance, commonly known as the Holiday Allowance Fund.
