II. Pension and Public service pension in a nutshell
Pension is the income you will live on in your old age. How much you receive in pension depends on when you were born, your salary, how many years you work, and when you retire. Everyone who lives or works in Norway is entitled to an old-age pension from the National Insurance Scheme (Nav) – regardless of whether you work in the private or public sector.
In addition to the pension from Nav, employers save for your pension as an employee. While pensions in the private sector vary, all public employees have the same pension scheme.
The Norwegian pension system
The Norwegian pension system consists of three main elements: At the base is the payment of old-age pension from the National Insurance Scheme. Everyone who lives or works in Norway earns the right to this pension, which is administered and paid out by Nav.
The second element is the pension from the employer, often called occupational pension. All employees earn a pension through their employer, but the scheme depends on where you work.
Finally, there is personal savings in the form of Self Invested Personal Pension, paying off debt on your own home, saving in a bank account, or investments, for example in mutual funds.
Public service pension as a complete package
Those who work in the public sector, such as the state, municipalities, and health enterprises, have a public service pension through their job. Employees are enrolled in the scheme when they start their job. Therefore, we refer to employees as members of the pension scheme.
The employer pays for the majority of the pension savings. Members are generally deducted two percent of their salary, which can be seen as a "co-payment."
How the pension accrues and the various elements it consists of are determined through negotiations between the parties in the labor market. In the municipal sector and health enterprises, the scheme is a complete package that, in addition to old-age pension, includes disability pension and survivor's pension. Many also have AFP (contractual early retirement pension), usually through a collective agreement.
The old-age pension from the occupational pension is paid out for life and provides security for you and your family if you become ill or if the worst should happen.
Scheme depends on year of birth and occupation
If you were born in 1963 or later, you earn an old-age pension for all months worked. Therefore, it pays to work longer – you will receive a higher pension.
Those born in 1962 or earlier can receive between 62 and 66 percent in total pension from the occupational pension and the National Insurance Scheme if they have full accrual of 30 years of full-time work in the public sector.
Disability pension if you cannot work
If you cannot work as much as before and become disabled, disability pension is part of the public service pension package. This pension is paid out if you are between 20 and 100 percent disabled. As a general rule, it is paid until the age of 67 – or the age limit for your position, if it is lower. When the disability pension stops, the old-age pension takes over as income security.
Survivor's pension provides security for the family
Public service pension also provides security for your loved ones. When you pass away and leave behind a spouse and possibly children under 20 years old, they receive a survivor's pension from KLP. Spouse's pension is paid out for life.
Check what you will receive in pension
You are probably wondering how much you will receive in pension. It varies from person to person and depends, among other things, on how long and how much you have worked.
You can check how your pension will be and how different choices, such as waiting to take out a pension, affect your payout in KLP's pension calculator on klp.no.
Stay updated
There are currently several changes happening both in public service pension and in the pension system from the legislator. KLP encourages employees in the public sector to familiarize themselves with the scheme and their own options before they retire.