Choose a pension provider myself?

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Choose a pension provider myself?

With your own pension account, your pension capital certificates from previous employments will be collected in your own pension account, unless you reserve yourself in Norsk Pensjon against your pension funds being collected.

You can choose any pension provider for your own pension account. If you choose a pension provider yourself, this choice is retained until you choose another provider.

If you do not make a choice

If you do not choose a pension provider yourself, your own pension account will remain with your employer's pension provider. With the employer's pension provider, your employer will pay for your administration costs and you will be entitled to the same fund management fee as your employer.

If you start to work for a new employer with a defined contribution scheme, your own pension account is automatically transferred to your new employer’s pension provider.

If you choose a pension provider

If you choose another pension provider than your employer, you will be responsible for the costs yourself. You will, however, receive a certain compensation from your employer for management costs. The compensation corresponds to what the employer would have to pay its pension provider to manage the pension that the employer saves for you.

By choosing a pension provider yourself, you may have other investment opportunities than the ones offered by your employer’s pension provider. You may be entitled to favorable prices, through your employer and through an employee organization, if you are member of one. If you choose a pension provider with lower prices than your employer’s pension provider, you can save costs. Any excess from the compensation paid by your employer will go into your own pension account as additional savings.

How to compare costs

You should examine the following prices to see if it pays to choose another pension supplier than your employer:

Administration cost: Usually a fixed price

Fund management fee: The price to manage your pension. Usually calculated as a percentage of saved pension capital and depends on your investment choice.

You should also examine if there are any additional costs.

An overview of the prices that apply can be found in Norsk Pensjon.

Cost allocation with the employer’s pension provider
Administration costs Employer
Fund management fee for pension earned from the employer Employer
Fund management fee for pension capital certificates You
Cost allocation when you choose pension provider
Administration costs You
Fund management fee for pension earned from the employer You, but a compensation will be paid
 Fund management fee for pension capital certificates  You

Example

You have pension capital certificates that amount to 200.000 kroner, and pension earned from your employer amounts to 100.000 kroner.

The pension provider chosen by your employer has a fee for fund management of 0,4 % (default investment choice) and the administration cost is 350 kroner.

With the pension provider you have chosen the fund management fee is 0,35 % and the annual administration cost is 150 kroner.

Pension capital
Pension saved by your employer 100 000,-
Pension capital certificates 200 000,-

 

Prices at employer’s pension provider

Administration

350,-
Fund management

0,4%

 

Prices at the pension provider you have chosen
Administration 150,-
Fund management 0,35%

Costs with your employer’s pension provider

Your employer covers cost for administration as well as management of pension being earned. You only pay for management of previously earned pension (pension capital certificates)

Costs with your employer’s pension provider
Administration 0,-
Fund management 800,-
Total costs 800,-

Costs with the pension provider you have chosen

You cover the costs for administration and fund management, but your employer will pay a compensation corresponds to the fund management costs your employer would have had to pay its pension provider.

Costs with the pension provider you have chosen
Administration 150,-
Fund management 1050,-
Total costs before compensation 1200,-
Total costs after compensation 800,-

In this example, your costs will be the same regardless if you choose a pension provider yourself or remain with your employer’s pension provider. The costs will however differ with the level of costs, amount of pension capital etc.