Norway’s dominant municipal pensions provider, KLP, has claimed a net competitive gain in last year’s tendering activity, with three out of the four procurement processes in the sector ending in its favour.
However, the Norwegian industry association for pension funds said independent municipal pension funds – one of the few staff pension provision alternatives to KLP that are available for municipalities – beat KLP on investment returns in 2025.
KLP announced a 7.9% return on its collective portfolio for 2025 in its annual results statement yesterday, with total assets having grown to NOK1.27trn (€110bn) by the end of last year from NOK1.15trn at the end of 2024.
KLP said the return had made it possible to add NOK26.8bn to customers’ premium funds, while customers’ buffer funds had been increased by NOK22.6bn.
Sverre Thornes, chief executive officer of the Oslo-based institution, said: “In a quarter characterised by economic uncertainty, we are particularly pleased that we have managed to combine good returns with safe management.”
In its statement yesterday, KLP also said it had strengthened its market position in 2025.
“Of the four tender processes carried out by municipalities and counties in 2025, one municipality chose to continue with its own fund, while Lier, Nordre Follo and Østfold County Councils chose KLP as their pension provider,” it said.
Østfold County Council had switched from its own pension fund to KLP, while Lier and Nordre Follo had opted to continue with KLP as their pension provider, KLP said.
“We are pleased with the results of last year’s tender rounds. We will do what we can to live up to the trust we have received,” said Thornes.
Flekkefjord Municipal Pension Fund was the pension fund which opted to continue with its own pension fund last year, after carrying out a procurement process.
As a result of Østfold’s decision to switch to KLP, it has left the combined municipal pension fund Pensjonskassen for Fylkene (County Pension Fund), which now covers only Akershus and Buskerud.
Independent returns better
The Norwegian Pension Fund Association (Pensjonskasseforeningen) reported that municipal pension funds had a weighted average return of 8.4% in 2025 on funds in the collective portfolio.
Christer Drevsjø, CEO of the lobby group, said: “These are considered strong, market-leading figures,” adding that the results were better than KLP’s results for the same period.
“The return shows that the pension funds continue to deliver, and that the asset management strategies are well-balanced,” he said.
Drevsjø said the good performance was not a result of one-off events, and the pension funds had had better returns over time, partly due to their high equity allocations.
Running an independent pension fund was a suitable option for many Norwegian municipalities, he said, adding that doing so could enable municipalities and other public entities to save large amounts.
“The municipalities also receive a return on the funds in the company portfolio. In addition, there are other benefits, including those related to lower disability. Locally anchored member services are also a major advantage for licensees,” Drevsjø said.
