Reform seen prompting Norwegian pensions growth
NORWAY – The work of the Norwegian Pension Commission is expected to lead to growth in the country’s pensions market, says market leader Storebrand.
The pensions commission, headed by former finance minister Sigbjorn Johnsen, is due to present its final proposals in October this year, having issued a preliminary report last September.
“The commission's findings may well lead to growth in the Norwegian pensions market in a number of areas, including the question of funding the earnings-related element of the state pension and looking at the possibility of individual choice for the management of personal fund entitlements,” Oslo-based financial group Storebrand said in its 2002 annual report.
It says it has “high expectations” for the government-appointed pensions commission. It added that it would continue to press for a “level playing field” of effective competition for the municipality pension market.
The committee outlined two basic models: a standard state-sponsored basic pension for all and a modernisation of the present system. It also said that future pension commitments ought to be fund-based and that pension levels should be more linked to actual earned income.
The International Monetary Fund has pitched in, saying that Norway’s current public pension system is “not financially viable”.
Storebrand says it “has enjoyed success” in providing defined contribution pensions to companies which did not already operate an occupational scheme. And it sees “exiting opportunities” in the need for increased pensions saving for an ageing population and changes in the Norwegian pensions system.
The firm provides pensions to more than 7,000 companies with over 200,000 employees.
Storebrand added that the merger between Storebrand Bank and Finansbanken would create a more efficient banking operation with 29 billion crowns (3.7 billion euros) of assets. It acknowledges that it has gone through a “turbulent period of weak results” and a failed merger Den norske Bank last year.
Its 2002 loss widened to 1.7 billion crowns from a 1.43 billion crown loss in 2001. It says: “This cannot be considered satisfactory.”