A fair AFP scheme for the future

The contractual early retirement pension scheme (AFP) is an important supplementary pension scheme in the public and private sectors. NITO believes that AFP is an important, but unfair scheme as it works today.

The NITO congress believes that the AFP scheme must be reformed if it is to be fair for the employees of the future.

The current AFP scheme is no longer an early retirement scheme, but a lifelong and valuable supplementary pension. All NITO's members in enterprises with a collective agreement are covered by AFP, but not all will receive a pension.

An evaluation carried out by the parties in the private sector in 2017 shows that about a quarter of all employees with a collective agreement will not receive AFP, due to strict conditions.

Today, all the time you work and are covered by AFP before the age of 53 does not count. In addition, you must also have been employed and had AFP early retirement pension at least seven out of nine years before the age of 62.

According to NITO's member surveys, AFP early retirement pension is not very important for those under the age of 45. This reflects the fact that it is only the years from the age of 53 that have an impact on whether or not you receive AFP.

NITO has joined the Joint Scheme for AFP in the private sector, and is obliged to include AFP early retirement pension in negotiated collective agreements. NITO has recently experienced that collective agreements are terminated due to the company's costs for AFP. At the same time, we find that it is becoming increasingly demanding to enter into new collective agreements, especially with employers who have a large proportion of younger employees far away from AFP age.

In the evaluation from 2017, many challenges were pointed out and highlighted. In 2021, the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO) prepared a proposal for a reformed early retirement pension, but negotiations on the final decision are currently on hold. In anticipation of a reformed AFP, AFP in the public sector will also have "gaps" from 2025. This means that more employees in the public sector may lose an important pension.

NITO believes that pensions for disabled people should continue to be paid outside AFP through good and predictable pension schemes.

A fair and reformed AFP early retirement pension must aim to increase support for collective agreements and strengthen organised labour, as was the intention of the scheme.

By ensuring that years of collective agreements provide accrual, regardless of age, you will give the collective agreements a clearer value and ensure that you close the "holes". Current funding must also be reviewed to ensure that the scheme is not underfunded.