Norway’s pension reforms allow for own pension accounts 

Norway’s pension reforms allow for own pension accounts
January 20, 2021

New rules for the establishment of “own pension accounts” in Norway took effect on 1 Jan 2021 and aim to improve the pension outcomes for individuals. Under the regulations, employees who are active members of a defined contribution (DC) pension scheme can consolidate previously earned DC pension benefits and contributions accrued in their current job into a single account. The government published final regulations in November 2020, and the Ministry of Finance issued accompanying supplementary regulations and transitional arrangements.  


  • All DC pension earnings from past and current jobs will be transferred to an “own pension account,” unless the employee elects to opt out. Employees are now entitled to receive accrued pensions for employment periods less than 12 months’ duration. Previously, pension amounts were returned to the DC fund.
  • Pensions funds transferred into an own pension account will be managed according to the same investment profile, and subject to the same fees. Employers remain liable for payment of the administration and management fees for the employee’s current pension accrual. Employees must pay the management fee for previously earned pension(s) unless employers opt to do so.
  • Employees can specify the period of time for which they want to receive their DC pension. Generally, the minimum period is 10 years, and the minimum age at which retirees can choose to stop receiving their pension is 77. Some exceptions are permitted, for example, if an individual’s total annual pension benefits are less than 20% of the National Insurance base amount. The accrual of a DC pension in an own pension account will result in fewer exceptions from the main rule, and more employees will receive payments to age 77.
  • Employees will receive information about their pension capital certificates in February 2021, and will have three months to opt out of transferring pension capital certificates for previous earnings to the own pension account. Pension capital certificates that guarantee payment of an annual interest will not automatically transfer to the new account — employees must actively choose to transfer them, subject to certain conditions.
  • Employees are allowed to select their own vendor to manage their pension plan, and do not have to use the employer’s provider. However, employees who select their own vendor must pay the associated administration and management fees. The employer must still pay a standard compensation for investment fees to the employee. This is calculated on the fee employers pay for the startup investment profile in their DC scheme, and pension providers will be responsible for the administration of this issue, not the employer.
  • Employers are subject to new information duties. They must inform their employees about pensions held in own pension accounts, and provide information about opt-out rights, investment choices, risk profile, expected returns and costs, and risk reduction measures for employees who are scheduled to retire soon. Norwegian pension providers will support employers with relevant information, but employers are responsible for informing employees.             

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