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VAM-Velferd, arbeid og migrasjon

Interactions between national and labour market based pensions in Norway: pension outcomes and policy processes

Awarded: NOK 8.5 mill.

The pension reform introduced major changes to the pension system in the National Insurance Scheme (NIS). Likewise, the occupational pension (OP) system and the contractual early retirement pension scheme (AFP) were both changed and adapted to NIS and thereby given a larger role in the total pension system. The changes that were made to OP and AFP and how these interact with the changes to NIS have not been widely studied. The aim of this project has therefore been to investigate how the total pension entitlements are distributed among employees in the labour market and how the inequalities in entitlements affect generations, occupational groups, men and women differently. The project has identified and analysed the scope of different occupational pension (OP) schemes and the contractual early retirement pension scheme (AFP) in the private sector in Norway, looked at the interaction between the OP and AFP schemes and analysed the factors that may affect the generosity of the enterprises? OP scheme and the availability of AFP. Our studies show that there are large variations in occupational pensions in the private sector, and that a crucial divide runs between enterprises with a collective agreement and those without. Since 2008, many defined-benefit OP schemes (DB schemes) have been discontinued or shut down and replaced by contribution-based schemes (CB schemes). An increasing proportion of enterprises have also raised the savings rate in their CB schemes, while few have reduced their level of savings; this applies to AFP enterprises in particular. In other words, in their changes to their OP schemes and definition of their level of contributions, the enterprises have disregarded the benefits from the AFP scheme. Close to one in every five private sector employees are entitled to AFP and OP schemes that exceed the statutory level (good schemes), while 19 per cent only have a statutory minimum scheme with no AFP entitlements (poor schemes). If we include those who work in small enterprises with less than ten employees, this will apply to approximately one in every three employees. These must be prepared to work until the age of 70 to 71 in order to obtain the same level of pension as in the old system. Currently one in every four employees who are entitled to an AFP pension when they are in their early fifties will lose this entitlement before they can start drawing it at the age of 62. The good schemes were most common in the finance and manufacturing industries, as well as the healthcare and social services in the private sector, while the poor schemes were most widespread in the construction industry, retail trade, hotel and catering and other private service industries. Manufacturing workers rarely have poor schemes, because the majority of them are unionised and entitled to AFP through central-level, national agreements. The findings indicate that pension entitlements are not widely used for purposes of recruitment, since need for more labour and recruitment problems have little bearing. Neither the employees educational level or type of work, nor the proportion of older workers seem to have an impact on the generosity of the pension schemes. Enterprises with good schemes tended to provide an OP to their employees even before this was made mandatory in 2006, and they have often bargained with their employees on pension entitlements, even though the OP schemes are not part of the collective agreements. Hence, good social partner relations at the enterprise level appear to be crucial for achieving favourable OP schemes. An important part of this project has also consisted in a review of the political processes surrounding the reform (at the central level), not least the processes involving the changes to the AFP and public-sector occupational pension schemes. In three different articles we have discussed respectively the roles of the trade union movement, the experts and underlying ideas. We show that the trade unions (especially the NCTU) had an impact on the process, but were also affected by it, so that their position changed as the process unfolded. The interaction between experts and politicians played an important role, not least because some of the key politicians who participated in this process had expert knowledge, or obtained comprehensive knowledge about pensions as they went along. The different outcomes of the bargaining in the private and public sectors also illustrate how explanatory models and metaphors that function as intended in one context lose their force in other contexts. We have also looked at the media coverage of the new system and found that the media are concerned with distribution effects (winners and losers), and place less emphasis on communicating the flexibility of the new system. Moreover, representatives of the finance industry are given ample space to provide expert advice on how each of us should adapt individually.

Flere av prosjektets resultater har gitt viktige innspill til politikere og arbeidslivets parter ved å avdekke hull og skjevheter i ordningene, og har slik sett bidratt i arbeidet med å forbedre de arbeidsmarkedsbaserte pensjonsordningene. Prosjektet har også bidratt til rekruttere flere forskere til pensjonsfeltet og til å utvide og bedre forskningssamarbeidet på pensjonsområdet nasjonalt og internasjonalt.

There is considerable research and debate on the reform of the old age pension in the National Insurance Scheme in Norway, but less is known about the related changes in the contractual pension scheme (AFP) and the consequences of the new regulations for occupational pension schemes in the private sector. Researching the overall pension system and the interaction between its different parts is crucial in order to understand changes in the underlying logic of the overall system and the strategic manoeuvres of various key actors, as well as its impact on the distribution of individual total pension levels and the resulting effect on extended work careers. The project will therefore focus on the overall pension system and the interplay between various scheme s. Module 1 maps the current distribution of different occupational pension schemes in the Norwegian labour market at both the establishment and individual level. In module 2, we will estimate actual future pension benefits for different groups of indivi duals, based on information on individual pension accrual, both public and private, and individual income data. In the 3rd module we study the political processes underlying the new public-private mixtures in pension provision. We emphasise the role of t he social partners and other stakeholders in the design of the pension reform, in particular the processes of adapting the occupational pension schemes both in private and public sector, and the ways in which the combined effects of the alterations are co mmunicated to the public. The fourth module is an international workshop, with the purpose of producing a comparative publication on new patterns of public-private mixtures in pension provision in Europe. The overall ambition is to map out and model the f ull impact of the 2011 pension reform, to improve understanding of the policy processes shaping various parts of the reform, and to place these findings in a broader European context.

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VAM-Velferd, arbeid og migrasjon