Norway's pension reform is now entering its final phases, with a new proposal potentially opening up the paid-up policies market, which has been stagnant for years due to onerous guarantees.
The country's Banking Law Commission presented its final section of a three-part report to finance minister Sigbjørn Johnsen last week. In this report, the commission looked into issues relating to how to connect existing occupational defined benefit schemes with the new legislation and necessary transition rules and timeframes towards a transfer to a hybrid system.
The industry had lobbied the country's regulator, without success, to change the rules from annual guarantees to guarantees paid at the maturity of a policy, which has made it impossible to transfer the policies between providers. The new proposal will make it possible to change these policies to fund solutions, which will open up the transfer market. The new proposals are expected to come into law by 2014
According to the commission, the model is a hybrid between current defined contribution and defined benefit models, which will offer more flexible solutions for setting up pension schemes.
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