In theory, the new product may affect about 1.3 million employees in the Norwegian private sector, all of which are members of a tax favourable occupational pension scheme established by their employers for the benefit of their employees. Foreign insurance companies, pension funds, credit intitutions and investment fund managers (UCITS management companies) will be permitted to offer the new product on a cross-border basis into Norway.
The new product is meant to be a hybrid between the existing defined contribution pension schemes and the defined benefit pension schemes, and thereby permitting an even greater range of variation than the existing pension schemes allow for today.
The proposed Bill intends, among other things, to:
- adapt to the new retirement pension in the Norwegian National Insurance Scheme, by building on the all-year principle, opening for flexible takeout of payments and further allowing for longevity adjustments;
- be an insurancebased alternative to defined benefit schemes, which may replace defined contribution schemes;
- relieve the pension providers’ financial risks and actuarial risks;
- reduce the employers’ accounting requirements on balance sheet recognitions;
- accommodate the implementation of the expected new capital requirements for insurance companies and pension funds under Solvency II.
The Ministry of Finance has suggested that the proposed Bill shall enter into force as of 1 January 2014.
For further information please contact:
Klaus Henrik Wiese-Hansen (Partner)
Gunn Kristin Qvarsten Olimstad (Senior Lawyer)
Christina Riisnes (Associate)