Norway: New pension scheme for the public sector

The Labour Unions and the Ministry of Labour and Social Affairs have agreed on a new pension scheme for employees in the public sector. The new pension scheme for the public sector is adjusted to a model more similar to most pension schemes in the Norwegian private sector. The pension scheme in the Norwegian private sector is usually a defined contribution scheme, where the employer pays a certain percentage of the employee’s salary, to a pension fund. The current pension scheme in the Norwegian public sector is a defined benefit pension scheme, which gives the employee a certain percentage of their salary retiring. The government’s aim is to ensure employees in the public sector a pension scheme that is more sustainable, and that encourages employees to work for more years. The new pension scheme for the public sector aims at making it more favorable to work for more years, but to still accommodate those who have to retire early. The new pension scheme also aims to make it easier for employees in the public sector to switch to the private sector, without it affecting their future retirement pension negatively.