Government Pension Fund of Norway

The Government Pension Fund of Norway comprises two entirely separate sovereign wealth funds owned by the government of Norway:

The Government Pension Fund Global (Norwegian: Statens pensjonsfond Utland, SPU) is a fund into which the surplus wealth produced by Norwegian petroleum income is deposited. The fund changed name in January 2006 from its previous name, The Petroleum Fund of Norway. The fund is commonly referred to as The Oil Fund (Norwegian: Oljefondet).

As of the valuation in June 2011, it was the largest pension fund in the world, but it is not a pension fund in the conventional sense as it derives its financial backing from oil profits, not pension contributions. As of March 2017 its total value is NOK 7.75 trillion (USD 892 billion), holding .8 percent of global equity markets. With 2.33 percent of European stocks, it is said to be the largest stock owner in Europe.

The purpose of the petroleum fund is to invest parts of the large surplus generated by the Norwegian petroleum sector, generated mainly from taxes of companies but also payment for license to explore as well as the State's Direct Financial Interest and dividends from the partly state-owned Statoil. The current revenue from the petroleum sector is estimated to be at its peak period and to decline in the future decades. The Petroleum Fund was established in 1990 after a decision by the country's legislature to counter the effects of the forthcoming decline in income and to smooth out the disruptive effects of highly fluctuating oil prices.

The domestic fund, the Government Pension Fund Norway, is managed by the Folketrygdfondet. The global investment fund is managed by Norges Bank Investment Management (NBIM), part of the Norwegian Central Bank on the behalf of the Ministry of Finance. It is currently the largest pension fund in Europe and is larger than the California public-employees pension fund (CalPERS), one of the largest public pension funds in the United States. In a parliamentary white paper in April 2011, the Norwegian Ministry of Finance forecast that the fund would reach NOK 4.3 trillion ($717 billion) by the end of 2014 and NOK 6 trillion ($1 trillion) by the end of 2019. According to the forecast the 2030 value of the fund would be NOK 7.4 trillion ($1.3 trillion). A worst-case scenario for the fund value in 2030 was forecast at NOK 2.7 trillion ($455 billion), a best case scenario at NOK 19.6 trillion ($3.3 trillion). By May 2, 2016, the value of the fund was NOK 7.0 trillion ($873 billion).

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