Norway’s Finance Ministry has drawn up a set of draft regulatory changes designed to give guaranteed pension customers more choice and improve the returns they receive.

The ministry announced last week it had sent out a consultation document on the proposed changes, with a deadline of 8 April for responses.

“The goal of the consultation is to come up with solutions that make customers fare better than they do today,” it said.

Guaranteed pension products include, among other things, defined-benefit occupational pension schemes and paid-up policies (fripoliser), the ministry stated.

The proposal includes the report of a working group formed in September 2018 from participants from the Ministry of Labour and Social Affairs, the Finance Ministry and the Financial Supervisory Authority, which were tasked with assessing whether changing the regulations around these pension products would be a clear improvement for customers.

The consultation involves two types of changes in the regulations for guaranteed pension products, the ministry said.

One is to extend customer choice by letting pension providers compensate paid-up policyholders for swapping their guaranteed benefits for pension fund investment choices, as well as allowing faster payment of small paid-up policies if customers want this.

The other type of change relates to pension providers’ business rules and is aimed at increasing the expected excess return for customers without jeopardising existing guarantees, it said.

“In such cases, the changes will entail a somewhat higher risk on customers’ surplus funds, and the effect for customers will depend on market developments and suppliers’ adjustments,” the ministry announced.

However, it said that such amendments to the rules – involving some transfer of risk from the company to the individual – would only be made if they could be adequately shown to be in customers’ interests.

According to the consultation document, the FSA has proposed removing the right of providers to account for bond investments in customer portfolios at amortised cost, where the multi-annual return on the investment at the time of purchase is locked in as a fixed annual return until maturity.

The FSA suggested replacing this with ongoing market valuation for the sake of “neutral transfer rules” and simplification, according to the document.