New Attempt to Negotiate Pension Rules for Employees With Special Age Limits

The employer and employee sides will now attempt to agree on new pension rules for employees with special age limits. These negotiations are highly significant for the future pension levels of several hundred thousand employees in the public sector.

Effective from 2020, major changes were made to the rules governing pensions and pension accrual in the public sector. The old 66 percent “gross schemes” are a thing of the past, and public sector employees now accrue pensions under rules that closely resemble the defined contribution pension schemes in the private sector. Employers no longer guarantee a certain pension level at a specific age, and the increase in life expectancy means that public sector employees must work longer to achieve the same lifelong pension level under the new rules as previous generations received under the old rules.

However, for a large group of public sector employees, the new pension accrual rules are very poorly suited. This applies to employees with special age limits, such as nurses, police officers, and employees in the fire and rescue services. These employees do not have the same opportunity to work longer (and accrue more pension) as employees without special age limits, and therefore, under the new rules, receive a much lower pension level than employees without special age limits. The parties were aware of this when they negotiated the new rules in 2018. They agreed that there was a need to make adjustments to the regulations for employees with special age limits, and that these adjustments would be negotiated in a later process. However, the negotiations proved difficult, and in the winter of 2020, the negotiations broke down. Five years after the parties agreed on the main rules for public sector pensions, we still do not have a complete set of regulations for a large group of public employees.

But now, a new attempt is being made! After the change of government, a new dialogue was established between the parties, and in the summer of 2022, they agreed on a new process agreement. A two-part process was planned: first, an investigation phase (until April 1, 2023), followed by negotiations. The negotiations are to take place in June, with the goal of reaching an agreement by July 1, 2023. The parties also agreed to establish a working group to assess the future need for special age limits. This working group is to submit its report to the Ministry of Labour and Social Inclusion by June 1, 2023.

Throughout the winter and spring of 2023, both the employer and employee sides have worked intensively to prepare for the negotiations on pension rules for employees with special age limits. Whether the parties will succeed in reaching an agreement this time remains to be seen. Much is at stake, and the outcome of the negotiations could have significant consequences for thousands of employees for many years to come. At the same time, life expectancy is now declining in more and more Western countries, including Norway! Perhaps it turns out that we will not live forever after all? In that case, the Pension Reform (which will soon celebrate its 20th anniversary) may have outlived itself.