All employers in Norway are required to set up a pension plan for their employees.
If you have been living and working in Norway legally for at least twelve months you are normally a member of the Norwegian National Insurance scheme. There are two exceptions: 1) If you reside in Norway, but work permanently in a different country, and 2) if you have been posted by an employer in a different country to work in Norway for a limited period. On both these occasions you will be a social security member in the country where you are employed.
In order to earn full pension rights in Norway you must be a member of the Norwegian National Insurance scheme for 40 years. If you do not fulfil this requirement, you may contact your local NAV office to find out how you can apply for a supplementary pension.
The National Insurance Retirement Pension is your state pension from the government. For each year of employment, 18.1 % of your wages are transferred to your pension account. Pension entitlements can only be accumulated up to 7.1 G, or around NOK 605 000. The longer you work, the more you will accumulate in your pension account. If you choose early retirement you will have fewer accrual years and hence a smaller pension. When you retire, the amount accumulated is distributed among the expected number of years of your retirement.
As a result of the great pension reform we now have an increased number of alternatives. If you have accrued a large enough pension you can decide when to retire at any point between 62 and 75 years of age. You can also take out all or part of your pension while still working. This freedom comes at a price however, namely that most of those who retire in the future will get less than today’s retirees. Therefore, private pension savings are more important than ever.
