When a pension fund member dies, their next-of-kin receive the accumulated funds.

However, members can choose to add one or more beneficiaries to their pension scheme. This applies to the capital pension scheme, the expiring annuity pension scheme (ratepension) and to the group life insurance.

Because your contributions to the pension schemes are tax deductible, Danish pension tax regulations carries restrictions as to who can be added as beneficiaries to your pension scheme. They are your next-of-kin, spouse/registered partner (including divorced spouses) and your cohabitant. Step-children, cohabitant’s children and their heirs are also eligible.

There are no restrictions concerning the beneficiaries of your group life insurance, the cost of which is not tax deductible.

Estate tax
Estate taxes are levied on capital pensions and expiring annuity pensions. The pension fund withholds estate taxes before disbursement. The rates are either 15 % or 25 %, favouring descendants in direct line. Spouses are exempt from estate taxes.