The proposal stems from a broad 2024 pension reform agreement in the Storting that called for the establishment of such a supplementary benefit within the National Insurance Scheme.  

– It is good that more and more of us are able to work for longer. But we must also ensure a dignified retirement for those who find it necessary, after a long working life, to retire early. The Government will propose an early retirement pension supplement that gives these hard workers a sound and secure pension,’ said Minister of Labour and Social Inclusion Kjersti Stenseng.

The proposed supplement is an annual benefit paid in addition to the National Insurance retirement pension, occupational pension and any contractual early retirement entitlement (AFP). It is to be available to those who draw their retirement pension early and do not have additional employment income.

Under the pension agreement in the Storting, the early retirement supplement is to be introduced at the same time as other proposed pension reforms and is to be modelled on the private-sector AFP supplement. The agreement also states that employer organisations and trade unions are to be involved in designing the scheme.

More people would qualify, but a long work record is required

A key issue has been whether to count the early retirement pension supplement when assessing whether an individual is eligible to draw a retirement pension before reaching standard retirement age. When assessing eligibility under the private-sector scheme, the supplement amount is not counted, but the Government has concluded that it should be taken into account when determining eligibility under the National Insurance Scheme.

–  If the early retirement pension supplement is not included in the calculation, many workers who lack AFP will fail to qualify for the scheme. The Government sees this as a problem. Even low-wage earners should be able to qualify for the early retirement pension supplement. We have therefore concluded that the supplement should be counted when assessing eligibility for early retirement. This will allow more people the option of starting to draw their retirement pension early,’ said Ms Stenseng.  

This approach will have implications. One is that the supplement would have to payable for life; it cannot cease at a certain age, as it does under the private-sector scheme at age 80. This will increase the cost and will lead more people to choose early retirement.

– The Government therefore believes certain eligibility requirements should be introduced to ensure that the scheme accommodates people who have been in the workforce a long time. We have taken inspiration from the comparable Danish scheme, where applicants must have a certain number of years of employment to access it,’ said the Minister.    

The Government’s proposed criteria for obtaining the early retirement pension supplement: 

  • Receipt of a full retirement pension from the National Insurance Scheme.
  • At least 35 years of pensionable income (including credited care periods) of at least 2.5 times the National Insurance basic amount (G).
  • Pensionable income (including credited care periods) of 2G in each of the 10 years preceding retirement.Average pensionable income not exceeding 7.1G in the three calendar years preceding retirement.      

The Government will propose a scheme with the following features:   

  • An early retirement pension supplement of 0.25G per year (currently about NOK 34 000) for those who begin drawing a full retirement pension five years before standard retirement age.
  • Reduction of the supplement by 1/36 for each month that retirement is postponed beyond the five-year point prior to standard retirement age.
  • The supplement amount is to be counted when determining whether an individual is eligible to draw retirement benefits before standard retirement age.
  • The supplement is to be payable for life but will be lost permanently if an individual receives pensionable income exceeding 0.25G (currently about NOK 34 000) in any one calendar year after retirement.

Employer organisations, trade unions and the parties that entered into the Storting's pension agreement have been informed of the proposed design of the scheme. The Ministry of Labour and Social Inclusion is preparing a consultation memorandum containing legislative proposals for implementing the pension agreement, including the early retirement pension supplement.

The Ministry intends to circulate draft legislation for review during the autumn.