The lobby group for Norway’s independently-run municipal pension funds claimed a victory this morning saying the funds beat the dominant provider KLP on returns for guaranteed pensions in 2023.

Christer Drevsjø, managing director of the Norwegian Pension Funds Association (Pensjonskasseforeningen), said: “The pension funds delivered a significantly better return in 2023 than with an insured solution with KLP.

“This is a valuable contribution to municipal finances for those with their own pension fund,” he said.

Figures collected by the association showed municipal pension funds had an average return of 7.66% on their collective portfolios in 2023, while for the larger group including municipal pension funds as well as other pension funds for public enterprises, the average return had been 8.07%, he said.

“These are very good figures, which show that the pension fund solution is suitable for delivering good results,” said Drevsjø.

KLP this morning reported a 6.4% return on the common portfolio for 2023, and said total group assets had exceeded the NOK1trn (€88bn) mark for the first time – rising to NOK1.02trn by the end of the year.

It said good returns in 2023 had allowed it to return NOK21.4bn to Norwegian local municipalities and healthcare customers this year.

Sverre Thornes, KLP’s chief executive officer, said: “We are getting higher returns going forward from both property and interest-bearing investments, and have increased our financial strength over the years.”

“That is why we are in a position to pass on so much of our surplus return,” he said.

In recent years, competition in the Norwegian municipal pensions market has warmed up, with Storebrand actively bidding where local authorities put their pensions provision out to tender, and the pension funds lobby speaking out about the benefits of using the pension fund model.

In a brief comment on the market situation in the annual report, KLP said: “The market situation for public-sector occupational pensions is stable, and customers with premium reserves totalling around NOK2.1bn decided to move their schemes away from KLP with effect from 1 January 2024.”

This figure compares with KLP’s total premium reserve of NOK573.6bn at the end of 2023.

Read the digital edition of IPE’s latest magazine