This is how you can get 300,000 more paid annually if you become disabled
60% of companies in the private sector do not have a disability pension scheme for their employees. NITO's pension expert warns of dramatic consequences and makes a clear call.
Inger Lise Sparboe Mørch (pictured), pension expert at NITO, asks you to be aware that only 40% of Norway's private companies have a disability pension scheme for their employees.
She warns: "There is a dramatic difference between whether you in the private sector are covered by a disability pension or not.
- If you become disabled, it is crucial for you that the drop in income does not become greater than necessary.
She knows of NITO members who have gone from long-term sick leave to work assessment allowance, and later become fully or partially disabled.
- For those affected, it is often a great burden. It has consequences both for the individual and for the family," she says. - If you are healthy, a scenario of disability is something most of us do not think about. It's a thought we don't dwell on, something we don't have to decide on.
Facts about disability pension and payment
- 10% of all people between the ages of 18-67 are disabled (NAV), i.e. an illness, injury or disability that causes the ability to work to be permanently reduced
- Having a disability pension scheme if you become disabled will have a decisive impact on how much you have to spend in such a situation
- If you work in a public enterprise, you have disability coverage through a public occupational pension. For those who work in the private sector, it is up to the management of the company whether you are covered or not.
If you are granted disability benefit, NAV will generally give you an income equivalent to 66 per cent of your previous salary.
However, this only applies to salaries up to 6 G (NOK 819,294). Many engineers and technologists in the private sector have a salary well above this level.
For private companies that have a disability pension scheme, the following scheme is the most common, i.e. in addition to the 66% that you receive from NAV:
- 3% of salary (regardless of number of G)
- 66% of salary over 6 G
- NOK supplement of 0.25% of 1 G (NOK 34,000)
If the company has a disability pension scheme, it must apply to all employees, not just individuals or groups of employees.
Secure more than NAV provides
"If you have been used to a salary that is significantly above the level covered by NAV, additional schemes such as disability pension will be very important if you become disabled," says Mørch.
She emphasizes that disability pension is the most important scheme for securing income beyond what NAV covers if you become disabled.
Why are there not more companies offering disability pensions? - There are probably several reasons why more people do not offer their employees disability pension. Firstly, because it has a cost, but also because there is little attention paid to this and therefore no great demand," says Mørch.
- We as a union have a responsibility. In companies where NITO has active business groups, this results in greater demand and it contributes to the companies having disability pension schemes. More people need to become aware of this, and see the consequences of not being surrounded by one," she says.
Mørch says that some union representatives have put in place disability pensions through the collective agreement, but that the scheme in most companies is established independently of the collective agreement.
Major financial consequences
Examples based on unequal pay
Example 1, salary: NOK 1.2 million
If you have a salary of NOK 1.2 million, NOK 540,734 will be the share from NAV and what you have to live on if you do not have a disability pension. This will then be the income until you are an old-age pensioner.
If you earn NOK 1.2 million and have a disability pension, the sum for you will be NOK 828,000. In other words, almost NOK 300,000 more per year.
Example 2, salary: 900.0000
If you have a salary of NOK 900,000, NOK 540,734 will be the share from NAV.
With NOK 900,000 and has a disability pension, the sum will be NOK 621,000. In other words, NOK 80,000 more per year.
How to get a disability pension scheme?
Mørch gives you some clear advice:
- Check with your employer: Do I have a disability pension scheme?
- If no, join a trade union like NITO.
- Raise the topic with your union representative and your company group. Ask the management to get a disability pension. Demand it!
Disability pension may also be in the management's interest
"Be aware that a disability pension scheme will be collective, so it will not apply only to you as an individual or you as a NITO group, but to cover all employees in the company," says Mørch.
She points out that the management of private companies themselves should have a great interest in getting a disability pension scheme. The bosses are the ones who earn the most, significantly above the minimum rate covered by the public sector.
" Maybe it's not that difficult to get this, it's just an initiative from a NITO group that is needed," says Mørch and smiles.
Do I have insurance that covers disability?
Mørch states that some employers have insurance schemes that provide a lump sum payment in the event of disability or illness.
Although such insurance schemes can be valuable, they will not normally replace the ongoing income security provided by a disability pension scheme.
"The difference can be enormous. A one-off payment can help there and then, but it cannot replace the financial security that a disability pension scheme provides year after year," she says.
"Some employers have both a good pension scheme and insurance coverage in the event of illness and disability. That combination is of course preferable," says Mørch.
She encourages employees to investigate which schemes apply in their own workplace, and to raise the issue with their employer if the company does not have a disability pension.
What is a corporate group in the workplace?
What does a union representative do, and what can they help you with at work?
- 10% of all people between the ages of 18-67 are disabled (NAV), i.e. an illness, injury or disability that causes the ability to work to be permanently reduced
- Having a disability pension scheme if you become disabled will have a decisive impact on how much you have to spend in such a situation
- If you work in a public enterprise, you have disability coverage through a public occupational pension. For those who work in the private sector, it is up to the management of the company whether you are covered or not.