Annual white paper on the Government Pension Fund
Press release | No: 15 | Date: 10/04/2025 | Ministry of Finance
Today, The Ministry of Finance is presenting the 2025 white paper on the Government Pension Fund (Meld. St. 22 (2024-2025)). In the white paper, the Ministry reports on the results and management of the Government Pension Fund Global and the Government Pension Fund Norway in 2024. It also discusses the work on responsible management, the framework for the Government Pension Fund, and the efforts to further develop the investment strategy.
– In 2024, the value of the pension fund increased significantly. However, in recent weeks, we have seen how the value can fluctuate significantly in a short period. High uncertainty about tariffs has led to substantial turmoil in international financial markets. Since the turn of the year, the value of the Government Pension Fund Global has decreased by approximately NOK 1,100 billion. We have a long-term investment strategy that enjoys broad support, and we remain calm in the face of turbulent times, says Minister of Finance Jens Stoltenberg (Labour Party).
–Sudden changes in strategy or hasty decisions must be avoided. In more unpredictable times, broad risk diversification remains the best approach. This is ensured through the established investment strategy, which is broadly anchored with the Storting, says Stoltenberg.
Good returns from the Government Pension Fund in 2024
In 2024, the value of the Government Pension Fund Global increased by nearly NOK 4,000 billion, to just under NOK 20,000 billion. The return on investments was over 13 percent measured in the fund's currency basket, or just over NOK 2,500 billion. Strong earnings growth and high valuations of companies in the stock markets contributed the most to last year's returns, with the technology sector standing out. Net capital inflow to the fund amounted to just over NOK 400 billion, as the government net cash flow from petroleum activities was significantly higher than the non-oil budget deficit. A weaker krone measured against the Fund's currency basket in isolation contributed to increasing the Fund's value in Norwegian kroner by over NOK 1,000 billion. Changes in the krone exchange rate do not affect the Fund's international purchasing power.
The value of the Government Pension Fund Norway increased by nearly NOK 30 billion last year, to approximately NOK 380 billion. The return was just under 8 percent measured in Norwegian kroner. From 2025, a rule for annual withdrawals from the Fund has been introduced. It entails that an amount equivalent to 3 percent of the Fund's value at the beginning of the year is transferred to the fiscal budget. The purpose is to limit the Government Pension Fund Norway's high ownership shares in the Norwegian stock market.
New expert council for the Government Pension Fund Global
As announced in last year white paper, the Ministry will establish an external expert council to examine current issues affecting the management of the Fund. The work to establish such an expert council is ongoing, and the composition of the council and its first assignment will be announced as soon as it is established.
Small companies in the Government Pension Fund Global's equity benchmark index
In 2021, the Ministry of Finance decided to reduce the number of companies in the Fund's equity benchmark index, partly to reduce management complexity. Over time, however, the number of companies has increased because the index provider FTSE Russell has included more companies in the index that the Fund's equity index is based on. This particularly applies to emerging markets. The phasing-in is still ongoing.
To maintain the intention behind the 2021 decision, the Ministry has decided to remove small companies in emerging markets from the equity benchmark index. The change means that the number of companies in the equity index is reduced by approximately 22 percent, from around 7,300 to around 5,700. This constitutes less than one percent of the equity index's market value.
New mandate provisions for the Government Pension Fund Norway on climate risk
The mandate for the Government Pension Fund Global was amended in 2022 to strengthen the work on climate risk. The Ministry of Finance has now included similar provisions in the mandate for the management of the Government Pension Fund Norway. The aim is to contribute to a holistic approach to managing and reporting climate risk. The regulation is anchored in the Fund's financial objective of achieving the highest possible return at an acceptable risk.
The considerations that the provisions are intended to safeguard are largely already part of today's management. The Fund's purpose, characteristics, and investment strategy, as well as the Folketrygdfondet’s organisation of the management, are important starting points for what will be an appropriate implementation.