This is how you can get more than NOK 100,000 more in pension
Especially if you are young, a simple move can now secure you more money when you retire. Avoid your pension being eaten up by high fees!
NITO's pensionexpert Andreas Moen (pictured) asks you to check your pension account today and choose a provider that does not eat up your pension.
Many people think that pensions are something you should care about later, not now. Such a thought can cost you dearly! The younger you are when you get into this, the better it is.
It is not only how good the pension scheme is that has an impact on what you receive in pension:
– Which pension provider you have; And how much you pay in fees and management costs for your pension accrual has a major impact on how much you are actually left with as a pensioner. You are free to choose which provider will manage your pension, and it will be beneficial if you switch to one with lower costs. The sooner you take action, the bigger the gains can be.
Andreas Moen, pension expert from NITO
Can I transfer my pension?
Everyone who has or has had a job in the private sector gets a pension account with money to be withdrawn when you retire. But then you may need to take action early!
The pension expert believes that pension providers charge a good fee for managing pension money.
He points out that many people do not know that the costs are deducted directly from your pension money. Thus, it is not noticeable in the same way as a regular bill. The result is that many people are stuck in expensive schemes without being aware of it.
The separate pension account scheme (EPK) has made it easier to transfer your pension: " You can always choose yourown provider. And that choice can have a big impact over time," says Moen.
Defined-contribution pension, pension capital certificate and own pension account
- A defined contribution pension when you are in an employment relationship is often called a "separate pension account" (EPK). It is a pension account that your employer puts money into every month for you. How much depends on how good the scheme is; between two and seven percent of salary.
- The employer also covers the pension provider's administrative costs. After the introduction of EPK, you can choose to invest the money with another pension provider. And you will get more pension if you choose a pension provider with lower costs.
- Pension capital certificates are money from defined contribution pensions with previous employers, and are also in this account, but you cover the costs of this part of the pension money, at the price your employer has agreed with the pension provider. If you do not have an employer with a defined contribution pension, you will normally pay significantly higher administrative costs than what applies to employers. Then it will very often be worthwhile to move the pension.
- If you are a member of a trade union, the offer through it is often better than what you get through your employer. Your employer must pay the same amount for fees and management costs even if you are able to move your account to a cheaper provider.
Examples
NITO member first saved 15,000, then much, much more
Moen talks about a NITO member he has been in contact with, who had a pension capital certificate with an active management of his pension accrual, with a price of 1.15 percent of the capital.
Through NITO's agreement with Nordea Liv, the corresponding management could be given at 0.39 per cent. With a capital of two million kroner, this amounted to NOK 15,000 saved per year. The member chose to change his or her pension solution and at the same time switched to index management, which made the savings even greater.
– 15.000 kroner is in itselfa remarkably large sum," says Moen. " But when you multiply this by all the years you are in work and think that the stock market also provides a good return on the money, the sum will be many hundreds of thousands.
NITO student who can save a lot over many years
A hypothetical example for a NITO student who has a pension capital certificate of a few thousand kroner from an employment relationship alongside his studies:
If the student gets a job in the public sector, and keeps the pension capital certificate, a significant part of the money could be eaten up by an annual administrationfee that comes in addition to a management fee of a percentage of the capital.
However, if the student chooses NITO's agreement with Nordea Life, there are no administrationfees in addition to lower management fees, and the money can be worth several times more when the student retires 40 years later.
Therefore, early choice can yield much more later
Moen asks you to take a check and take action now. Pensions are built over many years. The current scheme has lasted for about 20 years, while an entire working life usually lasts for 40 years. "The importance of management costs grows over time, the lower the costs and fees, the more money you will have to spend when you retire," says Moen.
He can understand that many people think pensions are complicated, but he believes that it doesn't really have to be that difficult.
"What you can control is price. Whether one supplier is better than another at creating extra returns is less clear. But the difference in costs is quite real," says Moen.
He recommends that you check what kind of scheme you have today.
Here's how to do it
1) Check your pension
Go to the website norskpensjon.no. Here you log in with Bank-ID, and you can see how much the costs are for your pension account.
Ifyou work in the private sector or have you ever had a job with an employer in the private sector after 2006, you have earned a pension during the time you have worked.
All earned definedcontribution pension (including previously earned "pension capital certificates") is collected with your employer's pension provider in what is called a separate pension account, but this only applies if you are employed by an employer in the private sector with a defined contribution pension.
2) Check if you can get a cheaper pension account
The solution you have today for your pension account is what the employer has managed to negotiate in terms of arrangement with a pension manager (bank/financial institution).
If you work in a company with very few employees, there is a high probability that you will pay relatively high fees and management costs. You should see if you can get a more affordable solution.
Find the compensation rate: This is the cost contribution you will receive from your employer if you transfer your pension money.
" The higher the compensation rate, the wiser it is to move," says Moen.
If you are a member of a professional organisation such as NITO, you will be able to save a lot by choosing the solution offered through Nordea, which is NITO's partner in banking and pensions. When NITO, with its well over 100,000 members, negotiates in the market, you get very low management costs and more pension for your money.
3) Consider choosing NITO's pension account
If the compensation rate is higher than what you can get from Nordea, you can easily chooseto switch.
You click on Move your pension on Nordea's website.
Nordea will then take care of the rest for you, and ensure pension accrual at a reasonable price. You can contact Nordea's advisors at any time for more information, or you can change your pension provider at any time.
It may be a good idea to check Finansportalen's price list and see which scheme you can get under and get an insight into the prices in the market.