In Norway, pensions generally come from three sources: the National Insurance Scheme (folketrygden), occupational pensions from your employer, and private savings. Together, they are intended to ensure your financial security in retirement, or if you lose your ability to work. Here is a clear and practical introduction to how these three parts work, and what you as an NTL member should know.

How does the pension system in Norway work?

The Norwegian pension system is built on three pillars.

• The National Insurance Scheme (folketrygden) is the fundamental pension scheme in Norway.
• Occupational pension and any AFP (early retirement pension) are schemes provided through your employer.
• Private pension savings are everything you save on your own.

Your pension may come from one or more of these three sources.

Old-age pension from the National Insurance Scheme

Everyone who works or lives in Norway earns an old-age pension in the National Insurance Scheme via Nav. This pension is something the state saves for you, and it is calculated based on income, number of years in work, and any care credits (more on that later). It is Nav that pays out the pension.

The state sets aside 18.1 percent of your salary each year into your personal pension account, provided you were born in 1963 or later.

• You can start drawing your old-age pension from the age of 62
• The earlier you start drawing it, the lower the annual payment will be
• You can check your accrued pension directly on Nav's website

The National Insurance Scheme provides a secure basic income, but it is rarely enough on its own to maintain the standard of living you are accustomed to. This is where occupational pensions and AFP come into play.

Occupational pension: How it works in the public sector

Occupational pension is a mandatory scheme that your employer sets up for you as an employee. For NTL members in the state sector, a specific scheme applies through the Norwegian Public Service Pension Fund (Statens pensjonskasse – SPK).

Defined benefit pension and hybrid pension

In the public sector, the occupational pension is usually defined benefit or hybrid:

• Defined benefit pension: Ensures you a specific percentage of your final salary, often 66 percent combined with the National Insurance Scheme. The payment is lifelong.
• Hybrid pension: Combines features from defined benefit and defined contribution schemes. It may include G-adjustment (where the pension account follows the wage growth in society), a 0-guarantee (ensuring the account balance can never be negative), and free investment choice.

In the private sector, the minimum requirement for defined contribution pensions is 2 percent of salary above 1 G. This is significantly lower than what public sector employees typically have. The Norwegian Confederation of Trade Unions (LO) is working to raise this rate to at least 4 percent.

Read more about your pension in SPK here: www.spk.no

What is AFP and are you entitled to it?

The Collective Agreement-based Pension (AFP) is a pension scheme for employees in companies with an AFP agreement. Which AFP scheme you are covered by depends, among other things, on whether you work in the public or private sector and what year you were born. You must also meet certain conditions, mentioned below.

In the public sector, AFP works as follows:

• Born before 1963: AFP is an early retirement scheme from age 62 to 67.
• Born in 1963 or later: AFP is a lifelong supplementary pension that can be drawn from age 62.

In the private sector, AFP works as follows:

• AFP is a lifelong supplementary pension that can be drawn from age 62.

To be entitled to AFP, you must:

• Be employed in an AFP-eligible company for at least 7 of the last 9 years before you turn 62
• Be employed in at least a 20 percent position
• Be employed in an AFP-eligible company for the last three years before drawing the pension

AFP is part of the pension schemes that the social partners negotiate. LO is currently working on a new AFP model intended to simplify the scheme and give more employees the opportunity to receive AFP. As an NTL member, you will be able to participate in the ballot on the new AFP scheme once it has been negotiated, likely in 2027.

Private pension savings

The final pillar of the Norwegian pension model is private savings. This is all the pension savings you manage yourself through bank deposits, fund savings, or investments. Private pension savings are voluntary, but can bridge the gap between the pension payout you want and the pension payout you receive.

Contact your bank to find the form of saving that best suits your situation.

What determines how much pension you get?

The size of your pension is affected by several factors:

• Lifetime income: Higher income results in a higher pension, up to an upper cap.
• Number of years in work: More years with income result in more accrual. Full accrual in the National Insurance Scheme requires 40 years.
• Age at withdrawal: It always pays to stay in work as long as possible. Early withdrawal means a lower annual payment, as your accrued pension money must be distributed over more years.
• Pension type: Different pension types can result in different pension amounts.
• Care years: Caring for children under 6 years old (or sick/disabled children under 18) provides pension accrual without employment income.

What is a typical pension to expect in the public sector?

A typical pension for public sector employees will consist of:

• Old-age pension from the National Insurance Scheme (based on 18.1 percent of salary)
• Defined benefit pension from SPK (aiming for 66 percent of final salary combined with the National Insurance Scheme)
• AFP if you meet the conditions

Disability pension: What happens if you cannot work?

If you become disabled, you receive a disability benefit from Nav. If you have a 100 percent disability benefit, you automatically receive a full old-age pension when you turn 67. Check Nav's website for more information about pensions when you are on disability benefits. Members of SPK have a separate disability pension scheme.

Pension for you as an NTL member

As an NTL member, you have a strong trade union behind you. NTL works politically for better pension terms and provides you with practical help as you approach retirement age. Read more about how NTL fights for your pension here.

Three things you should do now:

1. Check your accrual on www.spk.no (public sector employees) and Nav (National Insurance Scheme)
2. Use Norsk pensjon at norskpensjon.no for a consolidated overview of all pension agreements
3. Contact NTL before you retire; we ensure that you retain insurance coverage and receive the correct information

Read more: Are you going to retire?