Trade unions and employers in Norway have come up with a proposal for occupational pensions to take the form of individual accounts that will allow employees to choose their own pension provider.
The Norwegian United Federation of Trade Unions (Fellesforbundet) and the Federation of Norwegian Industries (Norsk Industri) published a joint statement formed on the basis of reports from consultancies Gabler and Deloitte concerning the occupational pensions.
The reports had been commissioned by the two organisations following labour negotiations in 2014.
Jørn Eggum, the leader of Fellesforbundet, and Norsk Industri’s chief executive Stein Lier-Hansen said jointly: “With the help of reports from Deloitte and Gabler, we have arrived at solutions we think are robust and good, with the possibility of individual customisation.”
They said they had agreed on a form of defined contribution pension scheme that made pensions safer through job changes, yet did not lead to increased pension costs for companies.
“Our proposal is that the employee creates a personal pension account where you are given the right to choose supplier,” they said.
The employer would pay into the employee’s pension account based on the agreed corporate contribution level.
On top of this, the staff member could then contribute themselves, up to the maximum allowable rate.
Financial industry organisation Finans Norge welcomed the proposal for individual accounts, saying it was something the life insurance industry should help to find good solutions for.
Stefi Kierulf Prytz, director for life insurance and pensions at Finans Norge, said occupational pensions were a key element in the pension reform and that there had been good experiences with an effective system based on good and healthy competition.
“Meanwhile, it is, of course, possible for improvements to be made to the system and individual elements that can make pensions simpler and more accessible,” she said.
“We totally agree we should look at changes that might develop the occupational system and provide better opportunities for individual pension savings.”
The organisation also agreed there should be changes to make sure pensions are safeguarded as people change jobs, by employees taking part in the placing and management of those pensions, and by making it easier for them to make extra savings towards retirement.
“In this respect, the proposal to introduce an individual retirement account is interesting and exciting,” said Kierulf Prytz.