NORWAY – The International Monetary Fund says Norway’s
803 billion-crown (99.4 billion-euro) Petroleum Fund “will not be enough” to cover future pension needs.

“Norway has the advantage of the Petroleum Fund, and the fact that future pension payments should be made clear by formally linking the fund to the pension system,” the IMF said in a report.

“However the Petroleum Fund will not be enough, because current and future oil revenues will fall far short of future pension needs.” Anne-Sissel Skånvik, head of information at the Norwegian finance ministry, was not immediately available for comment.

Norway is currently reviewing its pension needs and the Pension Commission is set to report in the New Year.

“Pension reform may be the most important policy decision facing Norway,” the IMF said.

The IMF recommended price, rather than wage, indexation of benefits, the linking of benefits eligibility to increases in life expectancy and broadening the base of benefit calculation to lifetime earnings. It also put forward enhancing incentives to stay in work.

Norwegian finance minister Per-Kristian Foss said in a statement: “The IMF’s recommendations give broad support to the work of the Pension Commission."

The Petroleum Fund, which returned 1.7% in the third quarter, last week said it was seeking managers to run active global and emerging market equities.