Norway Plans Occupational Pensions Overhaul
29 June 2012 (PLANSPONSOREurope.com) - Norwegian plan sponsors face overhauling current occupational pension arrangements due to new proposals for new collective pension insurance agreements submitted by the country’s Banking Law Commission.
The Banking Law Commission has submitted a report today about a proposal for new collective pension insurance arrangements to the country’s Ministry of Finance.
Two years ago, the Banking Law Commission was asked to investigate and propose amendments to the Companies Act, Defined Contribution Pension Act, as well as mandatory and laws governing individual pension schemes.
In the report the commission emphasises establishing a system of insurance-based pension schemes that are adapted to the main principles of the new National Insurance and financial and economic challenges such as pension funds and trusts have faced in the last 10 to 15 years in relation to the maintenance, financing and protection of defined benefit pension schemes.
The bill contains two options for controlling cost and risk sharing in the individual pension plan between the pension scheme, enterprises and workers. The models allow for “considerable” flexibility in the design of the individual pension plan. A standard model will enable plan sponsors to provide for employees' retirement at the same level and with some of the same properties as that of current defined benefit pension schemes. The second model is designed for enterprises that will provide for employees retirement at an annual payment predictability, without supplements and without the variable – or as little as possible – to trigger the requirements for the recognition of future pension liabilities in the entity's financial statements.
The report will be circulated with the three-month deadline. The Ministry intends to submit a bill during Winter 2012/2013.