NORWAY – Pension premiums are set to rise in Norway if the authorities decide to cut the maximum basic rate even further, occupational pensions provider KLP says.

KLP, Kommunal Landspensjonskasse, had told its customers that insurance premiums would be lower next year – but now it has got wind of changes that could lead to higher premiums.

It said it “recently got to know” that Norway’s Financial Supervisory Authority is considering reducing the maximum basic rate yet further. “If this materialises, the premium in all KLP’s pension schemes will increase”.

KLP also revealed in its interim report that at least one municipal client, which it didn’t name, has decided to terminate its pension arrangement with the company. KLP has 348 local and county authorities as clients.

It said that several of its major municipal clients had already made a decision in June to remain with KLP. As at the end of the quarter around 35 municipalities were going through the first stages of choosing their supplier, it added.

Spokespeople didn’t respond to requests for further information.

KLP, whose members voted in April to keep the company mutually owned, said it has increased its equity stakes in the quarter to 18.3% including derivatives. Equities returned 5.9% in the year to date, it added. Short-term bonds and money market instruments have returned 2.3%. Bonds held to maturity retuned 2.8%.

Total assets have risen 11% in the year to NOK146.5bn at the end of the second quarter. It made a profit of NOK1.8bn in the period.