Norwegian municipalities Kristiansund and Eide have announced they are moving their pension schemes to Kommunal Landspensjonskasse (KLP), the country’s largest life insurance company.
In two separate voluntary ex-ante transparency notices on the EU’s official tenders site TED, the local authorities – which both fall within Møre og Romsdal county in the northernmost part of Western Norway – said their new contracts with KLP would begin on 24 October.
Up to now, both Kristiansund and Eide have used pensions providers DNB Liv or Storebrand for their staff pension schemes, but the two life insurers are now withdrawing from the public service pensions market in Norway.
The municipalities announced the contract awards on the TED site, despite the fact there had been no competitive process.
Kristiansund explained the lack of competition in its official notice: “Based on DNB and Storeband’s decision to withdraw from the market, and that per 1.10.2014 there are no new concession applications to be dealt with by the Financial Supervisory Authority of Norway, no service providers in Norway or the EEA area will be able to achieve a concession in sufficient time to be included in the competition in 2014.”
Because of this, there is currently only one service provider available, and this is KLP.
The Kristiansund pension scheme has a total value of NOK110m (€13m), and the Eide pension has assets of NOK18m.
A spokesman for KLP said the company was taking on 58 local municipalities as pension clients this year, and that Kristiansund and Eide were two of them.
KLP is now the only provider of insured local authority pension schemes, since the DNB Liv and Storebrand exits, he confirmed.
Former public sector clients of DNB Liv and Storebrand do have the option, however, of setting up their own pension fund rather than passing the job to KLP, he said.
More than 20 Norwegian municipalities, including the larger cities of Oslo, Bergen and Trondheim, have their own schemes.
Northern Norwegian local authority Tromsø recently announced it was establishing an independent pension fund.
The KLP spokesman said there were around eight municipalities forced to leave DNB Liv and Storebrand that had yet to decide whether to join KLP or set up their own pension schemes.