Norwegian pension company KLP has reported a value-adjusted return of 4.2 per cent across the pension funds in the collective portfolio in the first half of 2023.

This represents a 6.3 percentage point improvement from the first half of last year, when the return was -2.1 per cent, and corresponds to NOK 21.3bn.

The primary driver behind the improvement was the 11.7 per cent return on the pension company’s equity investments.

It also saw positive returns on bonds measured at fair value (1.3 per cent) and measured at amortised cost (1.6 per cent), loans (1.7 per cent), and ‘other financial assets’ (1.8 per cent).

However, KLP’s property investments returned -0.8 per cent during the first half of the year.

Without the use of transitional rules, the pension company’s solvency capital coverage was 330 per cent, “well above” the target capital coverage of 150 per cent.

Commenting on the half-year report, KLP CEO, Sverre Thornes, said: “Strong stock markets have contributed to a good result for KLP in the quarter, especially considering that we have adjusted down the value of our properties due to increased interest rates.”

During the second quarter of 2023, KLP made progress on the development of a new digital pension system, adapted to the new regulations within public occupational pensions.

All retirement pensions and AFP have been transferred to the new system, which aims to accelerate case processing and provide better advice to both employers and employees.

“For employees in municipal and health Norway, this means that they can find out within seconds what they will get in pension, what it means to continue working in a full-time position, and what flexibility they have to be able to work alongside the pension,” Thornes added.

“This is important for everyone to be able to make good choices about their pension, and not least to help show what they earn by working more, both in terms of job size and age.”

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