Members of the Danish Parliament are set to receive a salary increase following a new remuneration reform agreed upon by a broad majority in the Danish Parliament. The reform also impacts ministers, increasing their salaries as well.
The agreement, detailed in a press release from the Danish Parliament, will raise the annual salary for a member of parliament from 948,000 kroner to 1.08 million kroner. The Prime Minister’s salary will increase from 2.09 million kroner to 2.48 million kroner annually.
In exchange for the salary increase, politicians will see a reduction in their pension schemes. Future pension contributions will be equivalent to approximately 18 percent of their salary.
The agreement was reached between the government parties, SF, Liberal Alliance, The Conservatives, The Radical Left, and Alternativet. The Red-Green Alliance, the Danish People’s Party, and the Denmark Democrats are not part of the agreement.
The new rules also stipulate changes to severance pay. Members of Parliament will receive severance pay for a maximum of 12 months, reduced from the current 6-24 months. Ministers’ severance pay is also reduced from a maximum of 36 months to 12 months.
Overall, the changes are projected to result in savings of 90 million kroner per year once fully implemented by 2090, representing a 20 percent reduction of current costs. According to the press release, this agreement significantly reduces politicians’ total lifetime income.
The agreement must be adopted in Parliament after the summer holidays and will apply after the next parliamentary elections. The current members of parliament will not have their terms changed; the new terms will only apply after the next parliamentary election.
The debate about the salaries and pensions of members of parliament has been ongoing for several years. In 2014, a Remuneration Commission was established by the Social Democrats, Venstre, SF, The Radical Left, and The Conservatives to make recommendations for a new salary system for politicians. The commission’s recommendations, which included a higher salary and lower pension for politicians, were presented in 2016.