Public-sector occupational pensions
Public-sector occupational pensions are the pension scheme for public sector workers. The employer pays for most of the occupational pension, while members generally have two per cent deducted from their salary. In the local government and healthcare sector, the occupational pension is a complete package that has been created following negotiations between the parties in the labour market.
What does the scheme consist of?
The public-sector occupational pension package includes retirement pension, contractual pension (AFP), disability pension and survivor's pension. The pension is paid for life.
The retirement pension can be divided into two categories
People born in 1963 or later accrue retirement pension for all years in work, so it pays to work for longer.
Those born in 1962 or earlier can receive 62-66 per cent in total pension from the occupational pension and the National Insurance scheme if they have full accrual from 30 years’ full-time employment in the public sector.
There are some separate rules for persons with a special age limit. Those born before 1963 can generally retire with a special retirement pension from KLP a few years earlier than those who do not have a special age limit. With or without a special age limit, there is also an option to retire on AFP, which is an early retirement pension payable from age 62 to 67.
For those born in 1963 or later, AFP is converted into a lifelong pension which can be drawn in combination with work, but no earlier than age 62. The rules are quite similar to those that apply to AFP in the private sector.
In 2023, the government and the parties in the labour market agreed on new pension rules for those with special age limits born in 1963 or later. People with a special age limit will receive a lifetime supplement to provide for a pension at the same level as those with a normal age limit. Some will also be able to retire early on what is called an ‘early pension’ (special retirement pension). However, anyone taking an early pension cannot draw a lifetime AFP at the same time.
The rules for AFP and pensions for all those with special age limits born in 1963 or later are meant to apply from 2025, but they have not yet been adopted.
There are several changes being made to both public-sector occupational pension and the pension system itself. KLP urges public-sector employees to familiarise themselves with the scheme before they retire. There may be major differences in knowledge and expectations among the employees, and it is useful for the individual to be well informed ahead of retirement.
Find out more in the section on ‘News about pensions in 2024’
Use KLP.no. You can find a lot of useful information about public-sector occupational pensions on the KLP website. Anyone who has a pension with KLP can log in to ‘My page’ and use the pension calculator to see how much they can expect to receive in pension from KLP, National Insurance and other pension schemes.