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Five key things you need to know about Norway's state pension

Robin-Ivan Capar
Robin-Ivan Capar - [email protected]
Five key things you need to know about Norway's state pension
Pictured is a pensioner. Photo by Artem Labunsky / Unsplash

Norway's pension system is often lauded as one of the best in the world. The Local takes a look at the five key things you need to know about retirement pensions in the country.

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There are three different pension schemes in Norway: the retirement pension from the National Insurance Scheme, occupational pension or early retirement pension from employers, and private pension.

As pension systems can be complicated to understand, we will go through the key aspects of the state pension, that is, the retirement pension from the National Insurance Scheme, for people born in and after 1963.

READ ALSO: Can you claim your Norwegian pension from another country?

Before we get into it, there are several concepts related to the pension system that need to be clarified – National Insurance Scheme membership and the minimum pension level:

  • National Insurance Scheme membership: If you live in Norway, as a general rule, you're a member of the National Insurance Scheme. Membership in the scheme entails paying an insurance contribution if you have an income from work or a pension.
  • Minimum pension level: The minimum pension in Norway is the guaranteed minimum retirement pension benefit from the National Insurance Scheme.
  • The "Din pensjon" online service: The state's "one-stop shop" for calculating your retirement pension, checking the earliest date at which you can start drawing your retirement pension, and applying for a pension.

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What are the preconditions for claiming a retirement pension?

In order to be able to claim a state retirement pension, you must have had pensionable income and/or have been a member of the National Insurance Scheme in Norway for a minimum of 5 years.

The retirement age in Norway is set at 67. While it is up to each individual to decide when and how they would like to draw their retirement pension and if they want to work while doing so, the right to start drawing retirement pension begins from the month after you turn 62.

As the Labour and Welfare Administration (NAV) points out, you must have sufficient earnings (at least equivalent to the minimum pension level) to draw a retirement pension before age 67.

What is the minimum pension level?

As of 2011, the minimum pension level replaced the basic pension scheme for old-age pensioners in Norway.

The minimum pension level is a guaranteed minimum retirement pension from the National Insurance Scheme. Note that the size of your pension is mainly based on your pensionable income.

As the NAV notes, you must draw 100 percent of your retirement pension and have "at least five years of National Insurance coverage" to be entitled to the minimum pension level.

To receive the full minimum pension level, you need to have 40 years or more of National Insurance coverage.

If you have less than 40 years of coverage, the minimum pension level will be reduced accordingly.

The amount paid at the minimum pension level depends on your marital status and several other factors, but you can use the NAV's online tool "Din pensjon" to calculate your retirement pension.

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When can I start drawing a retirement pension?

In practice, most people get to start drawing their retirement pension at 67 – due to the prerequisites set forward beforehand.

However, make sure to use the NAV's "Din pensjon" online service to check the earliest date at which you can start drawing your retirement pension.

How much retirement pension will I receive?

Several factors impact how much retirement pension you will receive. To start off, your choices have the most notable effect on the amount.

You can draw 20, 40, 50, 60, 80, or 100 percent of your retirement pension. How much retirement pension you choose to receive and when you start receiving it will affect your monthly pension.

The longer you wait to start drawing a retirement pension, the higher the pension payment will be. You can also increase your pension by continuing to work while receiving your retirement pension.

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In Norway, you are entitled to accumulate pension rights up to, and including the year you turn 75.

Make sure to use the NAV's "Din pensjon" tool to calculate your retirement pension, find out when you can start drawing a pension, and how much pension you have already accumulated.

The tool also offers projections, so you can see, for example, what would happen if you decide only to draw some of your pension.

When and how do you apply for a retirement pension?

In Norway, you are entitled to start drawing a retirement pension from the month after your turn 62 - if you have sufficient pension earnings. However, most people apply for their retirement pension at 67.

The NAV recommends that people apply for retirement pension around three months before they want pension payment to start.

Note: The earliest date on which you will be entitled to a retirement pension will be the month after the NAV has received your application.

As with all other things pension-related, you can also use the "Din pensjon" tool to apply for the retirement pension. Using the online service is recommended as it usually leads to faster processing.

You can also apply via a paper application, which will likely take longer to process.

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