Storebrand ASA: Transitional rules - new private occupational pension products

The Banking Law Commission's report NOU 2013:3 was submitted to the Ministry of Finance today. The Banking Law Commission proposes rules for transition from the present defined benefit occupational pension products to the new defined contribution products in NOU 2012:13.

The commission's report will now go to public consultation. The Ministry of Finance intends to present a bill to the Storting during 2H 2013. The new rules are expected to come into effect on 01.01.2014.


The proposals allow for a transition from the present defined benefit products to the new occupational pension products. Storebrand takes a positive view of:

  • The proposal to increase the maximum savings limits for the present defined contribution pension schemes.  

  • The way in which the proposals would facilitate a long-term adaptation to long life by means of escalation plans. 

  •  The way in which these escalation plans could also allow for a more appropriate guarantee structure for pension rights from the defined benefit schemes. The Ministry of Finance is expected to provide more detailed rules about this in the regulations.  

From now on, new occupational pension premiums will normally occur in defined contribution based occupational pension products that are well suited to Solvency II and the low interest rate level. The challenges for paid-up policies under Solvency II, as described in NOU 2012:3, will not however be resolved through the measures proposed in the report. The significance of the proposals for capital requirements under Solvency II will depend on how the escalation plans are formulated, the final treatment of earned rights and the adaptions to the proposals by pension providers and customers.

Many dissenting comments have been appended to the report and the proposals may be changed after the consultation process.  

About the proposal

  1. The Banking Law Commission proposes to raise the maximum limits for savings in the present defined-contribution pension schemes so that they correspond to what is proposed for the new hybrid products (maximum limit increased from 8% to 26.1%).  

  1. From now on, pension earnings will normally occur either in the new contribution-based hybrid products or in the present defined-contribution schemes. Allowance is made however for continuing the defined-benefit pensions of older employees born before 1962. Premiums for continuing defined-benefit pensions will be based on new mortality rates.  


  1. The report proposes a transition arrangement in which existing defined benefit pension earnings may be continued within the pension scheme. Premium reserves and additional statutory reserves linked to pension rights that have already been earned will be continued as separate pension holdings. Costs for these pension holdings will be covered by the employer and kept separate from new premiums.  

  1. It is proposed that paid-up policies are converted into pension certificates following the same principles as above. The pension holdings shall be sufficient to cover obligations on the date of payment. In the event that cover is insufficient, an escalation plan will be initiated. The proposed legislation gives the Ministry of Finance the authority to determine rules for such escalation plans in regulations. 

The holder of a pension certificate can choose the investment option for the pension holdings. Members with pension holdings linked to earnings in defined-benefit schemes (see point 3) can also choose the investment option for these.  When the investment option is chosen, the guarantee linked to the pension certificate/pension holding is given up at the same time.

Further work

The Banking Law Commission is now starting work on adapting the rules for death and disability coverage to the new pension products and new National Insurance. This part of the work will also include proposals for a review of the transfer rules, so as to adapt them to the new products. The Banking Law Commission aims to have this report completed during 2013.

In connection with publication, Storebrand is arranging a telephone conference on 7th January at 15:30 CET. The telephone conference will be in English and the presentation material will be available from our website before the conference.

To take part in the conference, please telephone +47 23184536. You will also be able to follow the telephone conference via a link from our website

Lysaker, 7 January 2013

Contact information

Director of Public Affairs Jan Otto Risebrobakken: Mobile +47 48 08 26 02

Head of Investor Relations Trond Finn Eriksen: Mobile +47 99 16 41 35


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Source: Storebrand ASA via Thomson Reuters ONE


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