Pension wealth in Norway 2018

The pension system in Norway ensures that everyone has a certain amount of accumulated wealth on the day of retirement. This report shows the value and distribution of this accumulated wealth among people in Norway in 2018. The total pension wealth is more than 4 times GDP, and on average about NOK 3 million per person.

The report shows the distribution of pension wealth across pension schemes, gender, age, education, industry and income. Earned rights in the National Insurance Scheme are by far the largest part of the pension wealth, while occupational pensions are more unevenly distributed both in terms of coverage rate and size. As many as 11 per cent have only pension wealth in the National Insurance Scheme when they approach retirement age. For most people, the pension wealth will be closely linked to the number of years of accumulation, their income and labor market history, so that it grows steadily towards retirement and then decreases with the annual payments. In the National Insurance Scheme, men and women have approximately the same average pension wealth, since even though men have a higher income on average, women have a higher life expectancy. On the other hand, men have higher pension wealth than women in occupational pensions and individual pension savings.

The higher the education, the higher the pension wealth. We find the largest pension wealth for people close to retirement in all education groups. People with primary school or no education reach an average calculated pension wealth of NOK 4.4 million at age 63, while those with university and college at a higher level achieve an average calculated pension wealth of NOK 9.4 million at age 65. Since accrued-to-date pension wealth is closely linked to age, we have also chosen to look more closely at the age group that is close to retirement age to illustrate the distribution across income and industry. Those who are employed in oil and gas extraction and mining have the largest pension wealth, both among women and men. We find the lowest pension wealth among employees in hotels and restaurants. Furthermore, we find that occupational pensions make up a greater part of the pension assets for people with high incomes, as pension rights on high incomes are to a smaller extent covered by the National Insurance Scheme.

The report provides calculations of accrued-to-date pension wealth based on a combination of information from pension providers and Statistics Norway's own calculations, done with a dynamic micro-simulation model called MOSART. There are several reasons why it may be important to have estimates of the distribution of households' pension wealth. First, accrued pension rights are of great importance for households' finances and their adjustments over the life course. Second, to the extent that compulsory savings through the pension system crowds out own savings, it will be difficult to compare wealth inequality across households and across countries when there are differences in pension systems (in terms of generosity, coverage and redistribution). The report therefore shows comparisons of pension wealth with other assets owned by households, and pension wealth in Norway compared with other countries, to the extent that is possible. The comparisons show that pension wealth in Norway is significant both relative to other household wealth and relative to other countries.