The Holiday Allowance Fund is a new fund that will manage the employees' holiday allowance in connection with the transition to a new Danish Holidays Act, which came into force on 1 September 2020. The new fund accommodates the wishes of both the employees and the employers. It ensures the employees’ holiday allowance, and furthermore allows the employers to keep the means as long as needed - at least until the individual's retirement age.
Reporting of frozen holiday allowance (max. 5 weeks of holidays) has taken take place for all employees upon the transition to the new Holidays Act in 2020, if they have been employed some time during the period from 1 September 2019 until 31 August 2020.
Holiday Allowance Fund
The holiday allowance will be managed by the Holiday Allowance Fund. The assets in the fund partly consist of assets paid into the fund by the employers and partly of assets, which the employers can choose to keep in their company as a loan.
The assets paid into the fund, will be invested by the fund in the financial markets, while the assets borrowed by the employers and kept in the company, must be indexed with an interest rate corresponding to the wage development.
Twice, the covid-19 crisis has caused a political decision about early disbursement of means from the Holiday Allowance Fund. First time in autumn 2020 and the second time in spring 2021.
A total of DKK 108 billion has been reported to the Holiday Allowance Fund, and after both early disbursements DKK 20 billion remain in the Holiday Allowance Fund.