Norwegian public sector pension company, KLP, has called for changes to the government proposals for a new AFP scheme in the public sector.

Responding to a consultation from the Ministry of Employment and Inclusion, KLP said that while it was positive that work on moving to the new AFP is underway, the qualification requirements in the proposal were too complicated and comprehensive.

It also warned that the proposals could weaken the pension rights of nurses.

The AFP in the public sector in Norway is a contractual pension for people aged between 62 and 65, and is the equivalent to what the participant would have received in a national insurance pension, without life expectancy adjustment, alongside a supplement.

In its response to the consultation, KLP recommended that the ministry assesses the level of precision in the proposals, as it believed many areas of the bill were not specific enough to the public sector.

It called for such questions to be clarified to ensure the legal certainty of its members and to avoid the development of different practices between pension providers to too much of a degree.

In KLP’s view, the ministry should use the opportunity provided by the consultation process and new legislation for public AFP to make more simplifications, adding that this will benefit both providers and members.

“AFP forms a large and important part of the total pension for our members,” commented KLP head of the legal department, Siv Holland.

“We had hoped for a simplified set of regulations, but the ministry has practically copied the rules from the private AFP without any greater level of precision.

“In order for our members to be able to understand and find out about their AFP rights, we had to go through thorough and detailed work in our response to the consultation.”

Holland added that KLP wanted the ministry to pay more attention to nurses in its proposals as it works on the development of the new scheme.

“I hope we get approval for the AFP to be legislated for nurses, this is important for that professional group so it will be exciting to follow,” she continued.

“In addition, I really hope that the ministry sees the need to clarify the rules for AFP, and that they will consider simplifying at least some of the proposals that appear to be unnecessarily rigid.”

KLP also cited concerns that some individuals, such as part-time workers, might be excluded from the scheme, and that the bill lacked a system for counting time working from the public sector to the private sector, which KLP warned would reduce mobility from the public sector to the private sector.

Furthermore, KLP warned that there was an urgency to get the new legislation in place as the new AFP will be paid out for people from the 1963 cohort when they pass the age of 62 in 2025.

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