Norway’s parliament is set to ratify proposals this autumn that will give defined contribution (DC) supplementary pension plans the same status as defined benefit (DB) plans.
Anne Grete Steinkje, consultant with Oslo-based adviser Pensjons & Finans, comments: “Labour companies at the moment cannot offer DC plans and this will change. However, companies will only be able to have one type of plan – either DB or DC. It will be possible to transfer schemes though.”
Steinkje says the main change will allow company DC plans similar ceilings on contributions and tax relief as DB schemes. “The law says nothing yet about what these limits will be,” she adds.
Other proposals in the legislation, she says, include regulations about members’ rights: “These are almost the same as for the new DB laws, concerning legal membership and asset rights when leaving the fund. DC plans will also have to cover risk benefits such as disability and spouse pensions through the same regulations as DB plans.”
Legislation will also stipulate management companies for the DC assets: “This will include insurance companies, pension funds and other legal investment management companies,” says Steinkje.
“It’s hard to say exactly when the legislation will be passed because during the autumn there will be discussions on the Norwegian budget, but this law will be put before the parliament at this stage,” she notes.
Wassum, the Swedish consultancy firm, has opened offices in Norway in anticipation of the changing pensions environment. Olav Øverland, managing director of Wassum at the Bergen office, comments: “We have been running over the summer with an office here and one in Oslo.”
He explains Wassum’s Norwegian implant: “Firstly, the Norwegian savings market is changing. Pensions are becoming more individual and at least part of the public sector is very affluent because of the oil industry. Also there are a lot of sales of energy companies by the municipal sectors around the country, so new money is coming into the market.”
As a result, Øverland says a number of Norwegian-based companies are setting up unfunded pension foundations.