IMF calls for Norwegian pension reform

NORWAY – The International Monetary Fund has reiterated its call for Norway’s public pension systems to be reformed to ensure its viability across generations.

The IMF said in a report on Norway’s economy that, “the public pension system needed to be reformed to ensure the financial viability and intergenerational equity of the system”.

The IMF said the objective could be achieved by indexing benefits to prices rather than wages. And it asked Norway “to address the disincentive effects of the pension and tax regimes to raise effective labour supply”.

Norwegian finance ministry spokeswoman Anne-Sissel Skånvik would not comment directly on the report.

The IMF report praised Norway for broadly adhering to fiscal rules for the use of oil revenues in setting the budget for 2003. But it said that the rules “did not provide sufficient savings to accommodate the large public pension obligations associated with the coming demographic transition”.

And it wanted Norway to clarify the conditions for smoothing the budgetary effects of changes in the market value of the Petroleum Fund.

In December, finance minister Per-Kristian Foss said in response to an earlier version of the report that he agreed on the need for pension reform. And he took note of the warning on a too strong increase in the use of oil revenues.

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