Pensions in Norway

Pensions in Norway fall into three major divisions; State Pensions, Occupational Pensions and Individual or personal Pensions.

All Norwegians citizens are entitled to get a state pension from the age of 67 in accordance with the Norwegian National Insurance Act (Folketrygdloven). The state pension is paid in full to Norwegian citizens who have lived in Norway for at least 40 years after the age of 16 and in lesser amounts to Norwegian citizens who have lived less time in the country (see Minimal state pension (Minstepensjon)).

The State Pension is calculated according to what the individual has previously earned from ages 16 to 67. The calculation is made by The Norwegian Labour and Welfare Administration (NAV).

The financing of the state pensions is based on a "Pay as you go" system. This means that today's work force is making the payments for the current retirees. The demographic structure in Norway suggests that in the future there will gradually be significantly fewer persons working in proportion to each retired pensioner.

The state pension is divided into three different parts, Public pension base rate (which everyone gets), Special supplement and Dependents supplement. Altogether this makes up the state pension scheme.

The Minimal state pension is a pension scheme which is paid to retirees who have not earned a special supplement (Særtillegg) or who have earned an Occupational pensions which is lower than the State Pension special supplement.

The minimal state pension provision is intended to prevent poverty in old age. All Norwegian citizens over the age of 67 are entitled to claim state pension, including Norwegian citizens who have never accrued pension, or those who have accrued a low pension.

Living costs in Norway are very high and have been increasing tremendously over the past few decades. Therefore, the Norwegian minimal state pension, which has been designed to cover the most basic living expenses in Norway, is adjusted each year to the increasing living costs in Norway.

Norwegian pensioners who have lived most of their lives in Norway and who are entitled the Norwegian minimal state pension are permitted to use this pension money in other countries too – due to this, many Norwegian retirees choose eventually to move abroad after they retire to countries where the Norwegian minimal state pension would provide them a much higher standard of living. On the other hand, Norwegian pensioners who did not live in Norway most of their lives and who are entitled the Norwegian minimal state pension, will receive the Norwegian minimal state pension only if they would stay in Norway for at least nine months each year from the age of 67.

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Wikipedia