With the new Danish Holidays Act and the establishment of the Holiday Allowance Fund, LD Pensions now manages two separate funds - the Cost-of-Living Allowance Fund and the Holiday Allowance Fund.
In connection with the Holidays Act, which became effective on 1 September 2020, it was decided that the earned holiday allowance by the wage earners during the transition year and until the new law became effective, will be managed in a fund where LD Pensions has the overall responsibility. The fund's official name is Lønmodtagernes Fond for Tilgodehavende Feriemidler (the Employee's Fund for Holiday Receivables). In everyday speech: The Holiday Allowance Fund.
LD Pensions has managed the assets in the Cost-of-Living Allowance since 1980.
About the Holiday Allowance Fund
- To manage and administrate the holiday allowance that the employees earned during the transition year until the Holidays Act became effective, it was decided to establish the Holiday Allowance Fund. LD Pensions manages the administration with the assistance of ATP, but the overall responsibility lies with LD Pensions.
- During the transition year, holiday allowance amounting to DKK 108 billion was reported to the Holiday Allowance Fund.
- In Autumn 2020, the need for financial stimulus during the covid-19 crisis ensured a political majority for disbursing max. three weeks holiday allowance upon request. On that occasion, DKK 52 billion was disbursed.
- In order to stimulate private consumption, disbursement of the remaining 2 weeks of holiday allowance is now possible during spring 2021. If the disbursement pattern follows the same pattern as disbursement in autumn 2020, it is expected that the fund's assets will subsequently amount to approx. DKK billion 21.5.
About the Cost-of-Living Allowance Fund
- The Cost-of-Living Allowance Fund manages DKK 32 billion on behalf of approx. 500,000 members. For a full-time employee, who was employed during the period from 1977-1979, approx. DKK 4,000 was paid into an LD account. Over the years, this amount has increased to more than DKK 157,202 (DKK 99,039 after tax).
- The money is paid out as a lump sum when requested by the member, if the member is 60 years old or for other reasons is entitled to disbursement.