The professional center for seniors, OsloMet
For now, the parties express that there will be an end to “stealing” pension contributions from pensioners who have been employed in the public sector.
This is a chronicle. Opinions in the text are at the writer’s expense.
From a political standpoint, the importance of public employees continuing in their positions for as long as possible after reaching retirement age has been a strongly expressed wish.
But, believe it or not: Today, the longer they continue in public office after the age of 67, its more reduced their paid and earned occupational pension.
For many all the way down to zero kroner, which can lead to the loss of several million kroner.
For most people, it is probably incomprehensible that something like this could be the case. But in 2010, a majority in the Storting decided that from 2011 a co-ordination between the National Insurance Scheme and public service pension should be implemented, which would lead to the aforementioned revocation of earned pension.
But what in the world might be the reason for this to continue to apply to other public employees?
The last case on the abolition of what is called the “Coordination Trap” was presented to the Storting after Representative proposal 141L (2019–2020) from the Center Party, the proposal only received support from the Socialist Left Party and the Red Party (in addition to the Socialist People’s Party).
This was in 2020. Later, there have been very many initiatives. There is every reason to interpret these proposals as meaning that today there are few, if any, parties that do not want to support a similar proposal as the one presented by the Center Party.
Many would call it “theft”
A number of concrete examples can be given of the financial loss for very many former public employees, which applies to over 20,000 people born between 1944 and 1953.
Here is an example:
For a public employee with a fairly normal income for 40 years, more than NOK 2 million will have been paid in occupational pension contributions.
This entire amount is confiscated as a result of the absurd Storting decision in 2010, and the result is that nothing is paid in occupational pensions.
For people with very high salaries in the public sector, the coordination deduction will not be so large that all occupational pensions will be eaten up. But it applies to anyone with normal or lower wages born from 1944 to 1953 – they lose the entire paid occupational pension.
Many will probably call this a theft on the part of the state, and fortunately it is the case that most (all?) Parties have realized it. Finally, they have familiarized themselves with the problem.
There have been suggestions and statements from almost everyone that will make it actually worthwhile to continue in a public position after the age of 67.
Over in the private
In private industries, you can take out a full pension at the age of 67 – and at the same time continue in a fully paid full or partial job.
And public employees like goes into position in the private after the age of 67, can take out a full public pension at the same time as full pay from the private sector.
What is the reason why the then representatives of the Storting prioritize the private rather than the public? Will current representatives ensure equal rules?
Before it left, the Solberg government (Conservatives, Liberals and Christian Democrats, with the FRP as a support party) presented Proposition 227 L. It is clear that they are against the Coordination Trap, and that the desire is that it should pay financially to work as long as possible, also in a public position, after the age of 67.
Much of the proposition could have been quoted, but I will confine myself to the following:
- The purpose of the state’s senior policy is “to contribute to more people staying in work longer”.
- That it should financially mean “better payoff to stay longer in work”.
- That in order to ensure sustainability, it is necessary “that more people stay in work longer and postpone their departure from working life”.
- That “more people than before will see themselves financially benefited by staying longer in work”.
This indicates that the mentioned parties are without a doubt in favor of abolishing the coordination between “ordinary” public pensions from Nav and state (SPK) or municipal (KLP) pension funds.
Support from the Labor Party
The Labor Party has made it clear that it is wrong for people to lose out on work after the age of 67, and I am sure that the Labor Party will support a new proposal to abolish the Coordination Trap.
Labor leader Jonas Gahr Støre has written the following in an e-mail to one of the members of the Working Group against the Coordination Trap:
- That the Labor Party’s starting point has been that «no one should lose out on a job beyond the age of 67, on the contrary. It must be rewarded. “
- That “… no one shall lose in the annual pension paid.”
His party colleague Frode Jacobsen stated, as a representative of the Labor Party at the Pensioners’ Association’s meeting in Oslo on 30 August, that: “The coordination trap is unfortunate.”
At the above meeting, all parties were represented, and no one expressed support for the coordination trap. The attitude was the same at meetings elsewhere in the country.
Yet, unbelievably, only members of the Storting and the government escape the trap.
As mentioned, at least 20,000 public employees lose all or part of their occupational pension by leaving the public service later than the age of 67.
In the example earlier in the article, more than two million was paid in occupational pension contributions, something the Government Pension Fund in his retirement blog denotes precisely as a deposit, which will be repaid:
“An important point to be aware of is that the monthly payments to us are not ‘traditional’ savings, but it is a pension contribution that ultimately makes up your share of the total cake when paying out your pension.”
If each of the 20,000 public employees on average loses “only” 30,000 per. years during 15 years as pensioners, ie a total of 450,000 for each, it means a pure confiscation of the occupational pension of a total of 20 x 450 million. That means nine billion kroner. But in reality, the amount is probably significantly higher.
Must be revoked
What has been referred to and pointed out above should lead to a unanimous Storting deciding that the Coordination Trap must be abolished!
Then the question is which parties in the near future will present a new concrete proposal. Or maybe there will be a joint proposal from several, or all, parties?
Finally, a strong call to all parties to officially state clearly how they want to behave – as soon as possible!