NORWAY – The Norwegian government has put into motion the process of setting up a mandatory occupational pensions regime that could affect up to 600,000 people.
The proposed new law will come into affect from next year and follows a white paper and consultation period. The parliament, the Storting, decided on May 26 this year that the law should come into force as from January 1 2006.
“It is proposed that the companies will have to establish schemes meeting the minimum requirements by the end of 2006, and that the schemes must have economic effect for the employees from July 2006 1 or earlier,” the ministry said. Schemes may be set up as either defined benefit or defined contribution.
“The proposal is an important element towards safe pensions for all, and will ensure old age pension rights in addition to pension rights from the national social security system for most employees,” said Minister of Finance Per-Kristian Foss.
The proposal largely follows a draft put together by Norway’s Banking Law Commission earlier this year.
“The Ministry of Finance proposes that the duty to have an occupational pension scheme shall apply to companies, both taxable and tax-free, with man-labour years above a certain minimum level.”
The act won’t apply to companies that have a pension scheme according to law or wage agreement for public employees.
Administration costs will be borne by the company, in addition to the minimum required levels for contributions or premiums.
And it is proposed that mandatory occupational pension schemes must include a premium waiver (insurance) which will provide saving for old age pensions in the case of disability.
The total yearly amount of contributions and costs at the minimum level for firms is put at around NOK3.3bn (€417m).