The Establishment of Government Pension Fund

The Government has today submitted a separate legislative proposition on the establishment of the Government Pension Fund. The Pension Fund will help to make clear that the Government accumulate assets to finance future pension payments under the National Insurance Scheme, says Minister of Finance Mr. Per-Kristian Foss. The need for sustainable government finances, and a pension system that is sustainable over time, requires government to continue the accumulation of considerable assets also in coming years.

The new Government Pension Fund is based on the Government Petroleum Fund and the National Insurance Scheme Fund. A separate administrative board or administration will not be established for the Pension Fund. In the proposition I have emphasized that the accumulation of financial assets that today takes place in the Petroleum Fund and the National Insurance Scheme Fund shall not be impaired, says Minister of Finance Mr. Foss. The fiscal rule for the use of petroleum revenues will also in the future be the operative guideline for fiscal policy. The fiscal rule aims for a long-term, steady and sound phasing in of petroleum revenues into the Norwegian economy in line with the expected return of the Petroleum Fund (corresponding to the part of the Pension Fund that is invested internationally). To continue the accumulation of wealth that takes place today through the National Insurance Scheme Fund, the Fund’s return will also in the future be added to its capital.

The legislative proposition on the establishment of the Government Pension Fund is based on Governments Report No. 12 (2004-2005) to the Storting: Pension Reform - Safeguarding Our Pensions, which a broad majority of the Storting supported. In line with Report No. 12 (2004-2005) the Government intends that accumulation of assets in the Pension Fund shall remain of a general nature, with the size of the Fund and future allocations not being directly related to government pension obligations under the National Insurance Scheme. After the Pension Fund is established The Ministry of Finance will give a broader discussion of the capital of the Fund, in relation to the developments in government pension obligations under the National Insurance Scheme. This will serve as a supplement to other indicators of the sustainability of government finances in the annual budget documents.