In connection with the forthcoming Holidays Act, which will come into force on 1 September 2020, it has been decided that the holiday pay accrued by employees during the transitional year until the new Act comes into force will be managed in a fund for which LD has overall responsibility. The fund’s official name is The Holiday Allowance Fund. In everyday language: The Holiday Allowance Fund.
With the establishment of the new fund, LD will in future manage two separate funds, namely the employees' holiday allowance fund and Dyrtidsfonden. In this connection, LD is changing its name to LD Pensions.
Takes into account the wishes of both employees and employers
The new fund meets the needs of both employees and employers. It guarantees employees’ holiday pay and also allows employers to retain the funds for as long as necessary – but no later than the individual’s retirement age.
Both funds in LD Pensions’ portfolio aim to maximise returns as much as possible, thereby building up supplementary savings that can be paid out when the employee leaves the labour market.
Dorrit Vanglo, CEO of LD Pensions, says:
"With The Holiday Allowance Fund, we now have responsibility for a new fund, strangely enough almost exactly forty years after LD was established. The Holiday Allowance Fund is very similar to what we are already familiar with and work with, so we look forward to continuing to deliver solid results, now with two funds in our portfolio."
About the Employees' Holiday Allowance Fund
- To manage and administer the holiday pay that employees accrue during the transition year until the new Holidays Act comes into force, it has been decided to establish The Holiday Allowance Fund. LD manages the administration with the assistance of ATP, but overall responsibility lies with LD.
- The Holiday Allowance Fund is expected to have a balance of DKK 100 billion.
About Dyrtidsfonden
- Dyrtidsfonden manages DKK 39 billion on behalf of 600,000 members. For a full-time employee who was in employment between 1977 and 1979, approximately DKK 4,000 was paid into an LD account. Over the years, this amount has grown to more than DKK 145,000 (DKK 92,000 after tax).
- The money is paid out as a lump sum at the member’s request, provided the member is aged 60 or is otherwise entitled to payment.
About LD and LD Pensions
- LD has managed the assets of Dyrtidsfonden since 1980.
- Now, 40 years later, LD will be responsible for a new fund with assets totalling approximately DKK 100 billion. This time, the task is also to safeguard employees’ financial security, which can be achieved by utilising the significant investment advantages offered by the pooling of assets.
About the new Public Holidays Act
- When the new Holidays Act comes into force on 1 September 2020, employees will have accrued holiday entitlement under both the old and the new rules: consequently, they will, in principle, be entitled to double the amount of holiday leave in a single year. As this is not appropriate for the labour market, the social economy or employers’ cash flow, it has been decided that The Holiday Allowance Fund will manage the holiday pay accrued under the old rules during the period from 1 September 2019 to 31 August 2020 until it can be paid out – typically upon reaching retirement age.
