Politics

Denmark: new agreement for salary increase and pension cuts for future MPs

A new political agreement in Denmark will raise salaries and reduce pensions for members of Parliament (Folketinget) elected in future terms. The reform, reached between the government and several opposition parties, has reignited debate over the fairness and transparency of politicians’ compensation.

Higher salaries for future MPs

Under the agreement, the base salary for MPs will increase from approximately DKK 870,000 to DKK 1.08 million per year (from about €116,500 to €145,000). The new level corresponds to the pay grade of a deputy director in the Danish civil service (“lønramme 38”). Similar adjustments will apply to future ministers, though only to those elected after the next parliamentary election.

The reform does not affect current members of Parliament. It applies solely to those elected in future legislative periods.

Reduced pensions and severance pay

While salaries are going up, future MPs will receive lower pension contributions. Instead of the current scheme, they will now receive around 18% in pension payments—the same rate as other state employees. Moreover, the generous severance pay previously available to MPs and ministers will be scaled back.

Currently, parliamentarians are eligible for severance (“eftervederlag”) of up to two years, depending on tenure. Under the new system, this will be capped at 12 months.

Image: Riccardo Sala // NordiskPost

A politically risky but long-awaited reform

The reform follows years of debate. In 2016, a special commission (Vederlagskommissionen) had already recommended a shift toward higher salaries and standardised pensions, but those proposals were never implemented. Political analysts now describe the new agreement as a “risky” move, given the public’s general opposition to raising politicians’ pay.

According to TV 2‘s political editor Hans Redder, “few things are more unpopular with voters than politicians voting to increase their own pay.”

The agreement was supported by a broad coalition including the Social Democrats, Liberal Party (Venstre), Conservatives, Liberal Alliance, Socialist People’s Party (SF), Danish Social Liberal Party (Radikale Venstre), and The Alternative (Alternativet).

Financial impact and public perception

Despite the headline increase in salaries, the overall financial effect is expected to be cost-neutral or slightly positive for public finances, once the new conditions are fully implemented. By aligning pension and severance terms with the rest of the public sector, the reform aims to improve transparency and legitimacy.

Still, the measure may face public backlash. Earlier attempts at reform had stalled precisely because of fears over negative voter reactions, despite cross-party acknowledgment that current conditions were difficult to defend.

The Danish Parliament‘s decision puts an end to nearly a decade of inaction, signaling a willingness among lawmakers to confront politically sensitive issues, even at the risk of public criticism.

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