Norwegian pension funds produced higher returns in the first half of this year than pension providers incorporated as insurers, with significantly higher equity allocations of pension funds one reason for their recent strong returns, according to the pension funds’ lobby group.

Pension funds in Norway posted returns on their collective portfolios of 7.6% between January and June 2025 compared to levels of around 6% achieved by insurance company pension providers, according to figures from the Norwegian Financial Supervisory Authority (Finanstilsynet).

Municipal pension funds produced stronger returns in the first half than private pension funds, at 7.7% compared to 7.4%, the figures showed.

The Norwegian Association of Pension Funds (Pensjonskasseforeningen) said pension funds had higher equity allocations than their insurer competitors – 42% on average for their collective portfolios at the end of June 2025, compared to less than 10% for insurance companies – according to a government report last autumn – for their guaranteed products in the private sector.

Christer Drevsjø, chief executive officer of the pension funds industry body, told IPE: “Pension funds have thorough asset management strategies, which are allowed to run over a longer time horizon. High equity exposure is one of the reasons for the pension funds’ good returns in recent years.”

Within the overall percentage figure for pension funds’ equity weightings of 42%, the FSA data show private pension funds had 43% in equity, while municipal pension funds had a slightly lower proportion of equities at 41%.

Drevsjø said Norwegian pension funds were generally very solid.

“They are subject to a specific Norwegian capital requirement, with requirements materially equivalent to Solvency II, but with their own calibration,” he noted.

“The pension funds are required by the authorities to have a solvency capital ratio of 100. At the end of 2024, the average was 178, which is much higher than required – and far higher than the solvency of life insurance companies,” he said.

KLP, the largest municipal pension provider – an insurance company – last month reported a return of 3.1% on its collective portfolio for the first half 2025, with group assets under management rising to NOK1.19trn (€102bn).

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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