The state pension is paid in full to Norwegian citizens who have lived in Norway for at least 40 years after the age of 16 and in lesser amounts to Norwegian citizens who have lived less time in the country (see Minimal state pension (Minstepensjon)).
The demographic structure in Norway suggests that in the future there will gradually be significantly fewer persons working in proportion to each retired pensioner.
[1][2] To compare - a Spain which is because of the climate, proximity, union part often chosen by pensioners, have average Spanish worker earns of €1,615 per month, and minimal wage of €752.9.
Many Norwegian workers have no other plan in store than the state pension scheme of the National Insurance.
According to the initial arrangement, the employees which took part in this pension scheme were entitled to receive an early retirement at the age of 66 if they wanted it.
Contributions are typically invested during an individual's working life, and then used to purchase a pension at or following retirement.
The new regulations of the new "Flexible Retirement Act" (Ny fleksibel alderspensjon) have been implemented gradually since 2010.
The pension reform is therefore intended to encourage more people to stay for a longer period in the workforce after retirement age.
[9] Norway's pension reform has enjoyed widespread public support as its objective to improve the sustainability of the pensions system in the long-run has derived in strong labor supply incentives to get citizens to work more and for a longer period while keeping essential features of the re-distributive nature of the old scheme intact.
The new system incorporates some of the old system's characteristics, such as: While bringing in new attributes like: While most countries reforming their national security systems rely on policy measures such as increasing the access-to-pension age, Norway has installed a scheme in which there is a reduction of the access age (from 67 to 62) accompanied by a flexible retirement from 62 to 75 and life expectancy adjustments, lowering pensions as life expectancy rises –this incentivizes people to work for more years to reduce the impact of growing life expectancy in a scheme that conversely relates it to pension benefits.
Nevertheless, and while the reform has been widely praised, there are some shortcomings pointed out by experts: the reformed system is complex and has no automatic mechanisms to adjust to future macroeconomic or demographic pressures, and it establishes a uniform annuity-conversion-factors-assessment that does not take into account the possible negative effects on groups with shorter life expectancy.