Private Sector Occupational Pension Schemes

Mandatory insurance

• All employees in private sector employed in businesses with at least two employees (at 75% employment or equivalent).

Voluntary insurance

• Self-employed individuals can join the OTP-scheme that they create for their employees (see voluntary defined contribution pension for the self-employed(Frivillig innskuddspensjon)).

General finances

• Funded schemes. 
• The cost for the administration of the scheme is to be carried by the employer.

Contribution rates

• The minimum requirement for schemes is that 2% of salary between 1 and 12 G¹ are placed into system by the company. 
• Ceilings: 7% of wage between 0 and 7.1 G; 18.1% of wage between 7.1 G and 12 G.
• It is optional whether or not the employee contributes.

Taxation of contribution payments

• Contributions are tax-deductible.

• Depending on scheme: employer or external company.

• Depending on pension plan.

Pension Benefits

• Lifetime earnings in private sector employment.

Benefit calculation

• Mostly defined contribution (DC) plans (around 90%).

Taxation and social security contributions on pension payments

• Pensioners pay reduced social security contributions (5.1%, compared to 8.2% for employees).
• All pension income is subject to taxation; a tax reduction of up to NOK 30,000 is granted to pensioners.