Seven of Norway’s nine mainstream political parties have reached a parliamentary majority on pension reform in the Nordic country.
The country's retirement age will increase alongside projected life expectancy under the new system.
The governing Labour Party (Ap) and Centre Party (Sp) were joined by the Conservative Party (H), Liberal (V), Green Party (MDG), Socialist Left Party (SV), and the Christian Democratic Party (KrF), in voting in favour of the proposal.
“I am happy about this historic and broad political agreement on a fairer pension system. The agreement illustrates that we can gather a solid majority around solutions that are good for people and that can stand the test of time,” Labour and Inclusion Minister Tonje Brenna said.
The government’s plan is based on proposals put forward by a parliamentary committee in 2022.
How will it work?
The current retirement age in Norway is 67, but people can begin drawing their state pension from the month before they turn 62.
Under the new rules, those born in 1972 will retire at 68 years, and the retirement age will rise by around one year per decade after that. Therefore, somebody born in the 1980s would have a retirement age of 69.
The right to access welfare such as sickness and unemployment benefits will also apply to those with an increased retirement age.
The lower limit will also be adjusted and increase with life expectancy.
Using the same example of those born in 1972, the lower limit will be raised to 63, while those born around 1982 cannot draw a state pension until they are 64.
Norway’s working 'age limit' will be increased too. Under current rules, employers can bring a working relationship to an end with no factual reason when they pass a certain age.
Public sector workers will see this age limit increased from 70 to 72. The limit in the private sector is 72.
The obligation to retire in certain occupations will also be removed to allow people to work longer. This obligation applies to professions with particularly demanding conditions, such as firefighters and health workers.
“This is an important contribution to combating age discrimination in working life”, Henrik Asheim, deputy leader of the Conservative Party, said.
There will also be increased tax deductions for those with private pension savings.
The pension scheme will be reassessed every ten years as part of the agreement.
Are there any exceptions?
Those forced to retire five years before the standard retirement age will receive a supplement via a hardship scheme.
The aim of this scheme is to cover those who are unable to work as they grow older, or due to poor health.
This will be 0.25 G. At current rates, this is around 30,000 kroner a year. G refers to the basic amount in Norway’s National Insurance Scheme. It is the amount which benefits and social security are set against.
There will also be increased provisions for those with disabilities.
What have people said about the proposals?
Seven of the main parties voted in favour of the proposals. However, the populist Progress Party (FrP) and far-left Red Party (R) were against the proposals.
The Progress Party believed those with the lowest pension would be left behind. The Red Party broadly agreed with the other proposals but disagreed with the increased retirement age.
The Norwegian Confederation of Trade Unions (LO) has called the agreement “Norwegian politics at its very best”.
Its leader, Peggy Hessen Følsvik, said she was satisfied that the government secured a cross-party agreement on the hardship scheme. Before the proposals were put through parliament, the trade union umbrella lobbied the government to include such a scheme.
Employer organisation, the Confederation of Norwegian Enterprise (NHO), said that it would now be essential to ensure that working environments allowed people to work for longer, but otherwise praised the government.
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