Denmark's state folkepension accrues by residence — a full pension takes decades of Danish residence, prorated otherwise — while ATP is a modest mandatory contributory scheme nearly all workers join. Most real Danish retirement wealth sits in occupational pensions negotiated into employment contracts, outside the agreement.
U.S. retirement benefits normally need 40 quarters (10 years) of credits. If you split a career between the U.S. and Denmark, you might fall short in each country alone. As long as you have at least 6 quarters of U.S. credits, the agreement lets you add your Denmark credits to reach eligibility — the U.S. then pays a benefit pro-rated to your U.S. credits only.
A Certificate of Coverage is the document that proves you're exempt from one country's social security. For U.S. coverage, the employer requests it from the SSA Office of Earnings & International Operations. Denmark's authority issues the equivalent when Denmark covers you.
Under the U.S.–Denmark agreement, a worker sent by a U.S. employer for 5 years or less normally stays under U.S. Social Security only and is exempt from Denmark's system. Your employer obtains a U.S. Certificate of Coverage as proof. Beyond 5 years, coverage shifts to Denmark.
Yes. If you have at least 6 quarters (about 1.5 years) of U.S. credits, the agreement lets you combine ("totalize") your U.S. and Denmark credits to reach the 40-quarter (10-year) threshold for a pro-rated U.S. retirement benefit.
The agreement has been in force since 2008.
Pension taxation depends on Denmark's domestic law and the separate U.S.–Denmark income tax treaty (if any), not the totalization agreement. The totalization agreement only governs which country's social security system covers you and how credits combine. Confirm pension taxation with a cross-border tax advisor.
Three layers: a prorated slice of the residence-based folkepension for your Danish years, a small ATP benefit from mandatory contributions, and — often the biggest — whatever occupational pension your Danish employment contract funded, which stays invested with that pension fund and is claimable from abroad regardless of the agreement.