5 Development of the management framework of the Government Pension Fund

5.1 Introduction

The Government Pension Fund Act makes the Ministry of Finance responsible for the management of the Government Pension Fund. The Fund comprises the Government Pension Fund Global (GPFG) and the Government Pension Fund Norway (GPFN). Operational management of the two parts of the Fund is carried out by Norges Bank and Folketrygdfondet, respectively. Asset management is governed by separate mandates laid down by the Ministry. The mandates include provisions on investment limits, responsible investments, risk management and reporting. The Ministry’s regulation of the management of the Government Pension Fund stipulates general principles and limits, in the expectation that more detailed internal rules will be laid down by Norges Bank and Folketrygdfondet.

The management framework for the Government Pension Fund is premised on a clear division of roles and responsibilities, both between the owner and the manager, and between the various bodies that supervise and monitor the Fund. This framework is discussed in several reports to the Storting on the management of the Government Pension Fund; cf. the overview in chapter 5 of Report No. 27 (2012–2013) to the Storting – The Management of the Government Pension Fund in 2012.

The Ministry is continuously developing the management framework for the Government Pension Fund. It seeks to ensure that the framework is well aligned with the investment strategy, whilst the governance structure and regulations are consistent with international best practice. Moreover, weight is attached to ensuring adequate supervision and monitoring of the management of the Government Pension Fund.

The entire management framework for the Government Pension Fund is available on the Ministry’s website (www.government.no/gpf). Supplementary management provisions adopted by the Executive Board of Norges Bank and the Board of Directors of Folketrygdfondet are available on the respective websites of the asset managers (www.nbim.no/en and www.ftf.no).

5.2 Changes to the mandate for the GPFG

Chapter 2 of this report presents plans for a number of changes to the strategy for the management of the GPFG. These include, inter alia, changes to the responsible investment strategy announced in section 2.5 and planned expansion of the environment-related investment mandates in section 2.6. The Ministry proposes amending the mandate given to Norges Bank following the Storting’s deliberation of this report. Any amendments to the mandate for the GPFG will be reported to the Storting.