Beneficiaries

Designating beneficiaries is about making a decision. It is an agreement you make with PFA about who should receive the money from your life insurance cover in the event of your death. When you designate beneficiaries, it is up to you exactly who should receive all or part of the money. If you do not designate any beneficiaries, the money will be paid out to your "next of kin".

Who should receive the money from your pension plan?

The options you have for designating beneficiaries may vary depending on your plan, and it is important that you consider these options and then make a decision. Deciding who should receive the money is important because it protects your dependants from serious financial consequences. And, at the same time, you can feel secure knowing that your dependants will have the financial means to move on if you pass away.

Please read the guide before you complete the declaration and forward the completed declaration to PFA Pension, Sundkrogsgade 4, 2100 Copenhagen or pension@pfa.dk. If you need advice on designating beneficiaries, please contact us at (+45) 39 17 56 56.

 

"Next of kin" – the standard option

Your PFA pension plan was established with your next of kin as the standard beneficiary, and, unless you have taken any steps to change this standard designation, it still applies. Exactly who your next of kin are depends on whether your plan was established before or after 1 January 2008.

 

Spouse’s/cohabiting partner’s pension
If you have a spouse’s/cohabiting partner's pension, it will, after you have passed away, be paid out regularly to your spouse, former spouse or cohabiting partner. However, pension payouts cannot be made to your cohabiting partner if you are survived by a spouse or former spouse that is entitled to the pension. A registered partner is considered equivalent to a spouse.

Special conditions must be met in order for someone to be entitled to this type of pension. Therefore, you cannot designate a beneficiary to a spouse’s/cohabiting partner’s pension. If you want information about the special conditions that apply to this type of pension, please call PFA's Advisory Services Centre at (+45) 39 17 56 56.

 

Who can you designate as beneficiary?

When you designate a beneficiary, you need to know if the payments to your insurance are tax deductible.

Tax deductible insurance plans (tax codes 1, 2, 3 and 33)
You can designate your:
- Spouse/registered partner
- Separated or divorced spouse/registered partner
- Children and their descendants (heirs of the body)
- Stepchildren* and their descendants
- Cohabiting partner (a partner you live with at the time of designation) 
- Cohabiting partner’s children and their descendants
- "Next of kin"
- No designation of beneficiary, which means that the payout will be made to the estate
* Your spouse/registered partner’s own children (also after separation and divorce)

Non-deductible insurance plans (tax codes 5 and 7)
You can designate who you want as your beneficiary, for instance your parents or a charity.

 

Legal heirs challenging the will

In certain cases, your legal heirs— i.e. your spouse and heirs of the body – will be able to object to a payout made to an designated beneficiary. The Danish bankruptcy court will determine whether the will is unfair.

As a starting point, your pension plan is established with your next of kin as the standard beneficiary, meaning that, in the event of your death, we will pay out the money from your life insurance cover to your "next of kin".

Who are your "next of kin"?

The concept "next of kin" has two definitions. Which definition that applies to your pension plan depends on whether your pension plan (policy) and beneficiary designation were established before or after 1 January 2008:

 

"Next of kin" – pension plans established AFTER 1 January 2008 (new rules)

In order of priority:

- If you do not leave a spouse/registered partner: cohabiting partner that you live with as if you were married and for which one of the following applies:
         a. At the time of death, you have been living together for two years.
         b. At the time of death, you are living together and have, have had or are expecting a child together.
- If you do not leave a spouse/registered partner or cohabiting partner: heirs of the body, i.e. your children, grandchildren, etc.
- If you do not leave any heirs of the body: heirs according to will
- If you have not drawn up a will: other heirs according to the Danish Inheritance Act (parents, grandparents, etc.)
- If no heirs exist, the money will be paid to the estate.

"Next of kin" – pension plans established BEFORE 1 January 2008 (old rules) 

In order of priority:

- If you do not leave a spouse/registered partner: heirs of the body, i.e. your children, grandchildren, etc.
- If you do not leave any heirs of the body: heirs according to will
- If you have not drawn up a will: other heirs according to the Danish Inheritance Act (parents, grandparents, etc.)
- If no heirs exist, the money will be paid to the estate.

 

If this is how you want the order of priority to be , you do not need to take any action.

You can see which of the two definitions of ‘next of kin’ that applies to your pension plan in your pension certificate or policy at My PFA.

 

Separate property and tied-up funds

If you have special wishes regarding how your life insurance payouts should be managed after your death, you have the following options.

 
Separate property

You can decide that the payout should be separate property of the beneficiary. Among other things, this ensures that the beneficiary is not to share the payout in the event of separation or divorce.

 

Tied-up funds

If you believe it best for a designated beneficiary not to have access to the payout until a certain age, you can choose to tie up the funds. This also means that the payout will be separate property of the beneficiary.