Pension contribution structures in Norway are most often based on a multiple of G (the National Base Amount currently equal to NOK106,399). Employer-sponsored plans typically base pension contribution structures on multiples of G. Plans often have no contributions between NOK 0 and 1G, then a set contribution rate between 1G and 7 G, and a different, higher, contribution rate between 7 G and 12G. This contribution structure allows higher earners to accrue pension savings commensurate with their pre-retirement income. Pension eligibility has generally focused on full-time workers making more than 1G. Seasonal workers were covered under different pension legislation, part-time workers could be excluded if their hours were less than 20% of full time, and larger employers would only allow employees with a minimum salary greater than 1G, or NOK 106,39,9, to participate.
Retirement benefits are provided through:
- The National Insurance Scheme, administered by the Norwegian Labour and Welfare Administration and,
- A mandatory occupational pension scheme provided by employers
Employers are required to provide supplementary retirement benefits where prescribed under a collective agreement.
Under the new legislation, all workers, especially low-paid workers, have the opportunity to increase their pension savings by participating in their employer’s private (mandatory and supplementary) occupational pension scheme starting from NOK1,000.
Employers are now required to include in their private mandatory and supplementary (if any) occupational pension scheme all employees making more than NOK 1,000, regardless of their salary or employment status (full-time, part-time or seasonal worker).
Contribution structures have also changed. There is now a minimum employer contribution of 2% calculated on all salaries from NOK 1 up to NOK 1,276,788 (or 12G). Plan rules can allow for employee contributions, but not in lieu of the employer’s mandatory minimum contribution.
An additional measure attached to the legislation decreased the enrollment age for the private occupational pension schemes from age 20 to age 13, thus enabling younger workers to start pension savings earlier.
To ensure compliance by the deadline, employers need to conduct meetings with their broker and pension committees and establish a cost calculation assessment in order to decide how to best implement the new pension reform. Once employers have more visibility on how to implement the changes, they will need to update any other relevant information material for their employees and providers.
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