NORWAY - Norwegian minister of labour and social affairs, Bjarne Håkon Hanssen, has confirmed that the new government will review the agreement-based early retirement system (AFP scheme) in 2006.
The current retirement age in Norway is 67, but the AFP scheme makes it possible for employees to retire at the age of 62 without losing any pension rights, it is however required that that an employees job is abolished or reduced before early retirement can be taken.
Hanssen wouldn’t comment on whether the state's economic contribution to the scheme would be reduced.
He told Global Pensions: I don't want to take people's rights away from them. I want to find a model which is economically sustainable over time, and which supports the government's goals for a future pension system.
A new proposal for the AFP scheme now looks certain to be introduced in spring 2006.
I aim to issue a white paper in spring (2006) with a proposal for a new national insurance savings plan, the minister said.
Critics say it will be impossible to maintain the current early retirement system and at the same time encourage people to work longer
The former Conservative government suggested the abolishment of state contributions to the AFP scheme to make it an exclusive agreement between employer and employee.
The scheme, which was introduced in 1989, covers 60% of Norway's working population in private and public sector.
The state currently covers 40% of the expenditures of the scheme for 64, 65 and 66 year olds, the rest is covered by the employer. For 62 and 63 year olds the employer covers the cost solely.
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