Norway proposes DC law amendments
NORWAY – The Ministry of Finance has issued a raft of proposed adjustments to the law on defined contribution (DC) pension schemes that came into force at the beginning of the year.
When the Norwegian Parliament ratified the law last autumn it asked the Ministry of Finance to put forward amendments on some key issues.
The law allows companies to start new DC plans in parallel to old defined benefit (DB) schemes.
One of the major proposals deals with the flexibility of annual contributions, says Hilde Olsen, spokesperson for the Norwegian Department of Finance.
Currently, companies can, to a certain degree, decide the percentage of its employees’ contributions, with a maximum of 5% for an annual pay of up to NOK300,000 (e37,000) and 8% up to NOK600,000, but the new law would allow workers to deviate from the contribution level by 25%, says Olsen.
Another important aspect is the legislation for parallel schemes, when firms have both a DC and a DB scheme.
“ Of course it’s very difficult to give precise rules, because the systems are different, so you can’t say the benefits should be the same. But, the companies should aim at the same level of compensation for both scheme members,” says Olsen.
Employees should also be able to choose which scheme they want to participate in, according to the proposals, and should also have the possibility to change plans if major changes occur in the schemes.
A date has not yet been set for parliamentary debate, but Olsen says it is likely that the adjustments are going to be discussed before the summer holidays, probably some time in mid-June.