The stable world of Norwegian pensions is at something of a crossroads. Spurred on in part by comments from the likes of the International Monetary Fund, which said earlier this year that Norway’s current public pension system is “not financially viable”, the country awaits the final presentation – expected in October this year – of the Norwegian Pension Commission headed by former finance minister Sigbjorn Johnsen.
The Commission issued a preliminary report last September, which broached areas such as funding the earnings-related state pension and looking at the possibility of individual choice for the management of personal fund entitlements.
However, almost three years after Norway introduced long-awaited legislation to encourage the take up of DC occupational pension plans, pension providers, asset managers and consultants are still waiting for the market to take off.
The legislation has proved to be a damp squib with slower than expected take-up by small and medium-sized companies without occupational pension funds.
As a non-member of the EU, it might be expected that the pan-European Pensions Directive would have little effect on Norwegian pensions. However, Anne Grete Steinjker, an actuarial consultant with Aktuarene in Oslo, comments: “We are in the same boat as all the other European countries I think and if you look at the European Directive for the insurance sector, for example, it has had the same impact in Norway as all the other EU countries.”
Rolf Skomsvold, general secretary of the Norwegian Association of Private Pension Funds, adds: “I think in fact we have to adapt the rules for the pension directive as a result of bilateral agreements we have with the EU, which oblige us to follow rules in this field too. “The same that will apply for the rest of Europe will apply for us.”
“It may be that we will have to ease the investment rules because they are really rather stringent in Norway and they will have to be relaxed. He adds: “There is a permanent working group at the government level known as the bank law working commission, of which I am a member, where we are set to more closely discuss the implications of the directive for Norwegian pension funds this coming winter.”