Norway, like a number of other European countries (Germany, Italy, Poland and Sweden) before it, recast its pension system in 2011. It elected to introduce individual notional accounts,¹ phased in over ten years.

Almost a third of Norway’s workers are employed by the public sector but it was not covered by the reforms as several attempts to reach an agreement between the government and labour organisations all failed.

The then-effective system, which dated back to 1917, was based on the “66-65-30” rule under which a maximum of 66% of the final wage was guaranteed at the age of 65 after 30 years’ contributions. In some cases (harsh working conditions, ill health), workers were able to take early retirement at 62.

In late 2017, the four unions representing the entire public sector eventually agreed to resume negotiations provided all their members were able to vote on the new system.

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An agreement to align the private and public sector systems was signed six months later. It paved the way for three principal changes to the latter system:

• The option of stopping work at 62 and continuing until 75. More than 30 years’ contributions will also increase the amount of the pension.

• Entitlement to carry on with salaried employment after retirement, without the pension being reduced and irrespective of the income received

• As compensation, pensions will be increased by 10% for employees who retire at 62 and who meet early retirement criteria

The legislation was adopted by Parliament last June and will take effect on 1 January 2020. As for the private sector, it will apply as follows:

• People born up to 1958 will remain subject to the current system

• Those born between 1959 and 1962 will be entitled to a hybrid system on a pro-rata basis

• For those born after 1963, the new arrangements will apply with contributions being transferred to the new system

The Norwegian government is looking to actively encourage civil servants - who are willing - to work longer, especially by offering a gateway to the private sector which is now more appealing due to the unified system.


¹ Pensions are indexed to salary increases, less 0.75 points.