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The government would rather lose Folketrygdfondet for money than allow it to own even more individual shares on the Oslo Stock Exchange or in neighboring countries.
Finance Minister Jan Tore Sanner (H).
Sea Berg-Rusten
Published:,
It appears in the annual report to the Storting on the Government Pension Fund Global and the Government Pension Fund Norway.
The latter fund is managed by Folketrygdfondet. This fund has been depleted for many years and was worth NOK 257 billion at the end of the second quarter.
At the same time, the fund is about to peak when it comes to ownership of some companies on the Oslo Stock Exchange. The fund can only hold up to 15 percent in sole proprietorships.
Last year, the fund sent a letter to the Finance Ministry outlining a number of options to deal with the situation. One of the solutions mentioned was to withdraw money from the fund.
– We will evaluate it until the next announcement, which arrives in spring 2021, says Finance Minister Jan Tore Sanner (H) at a press conference on Monday.
When asked if it is a good idea for the state to be able to withdraw money from Folketrygdfondet during a period with less room for maneuver in the use of oil money, Sanner responds as follows:
– It is important for me to emphasize that this is not an attempt to strengthen the state budget. It’s an assessment of how dominant the Norwegian Government Pension Fund should be on the Oslo Stock Exchange, says Sanner.
Single withdrawal or annual withdrawal
Last year, Folketrygdfondet advised the government to reduce the share of the equity portfolio in Norway and to allow the fund to make a greater share of its investments in Denmark, Sweden and Finland.
“After an overall assessment, the ministry believes that holdings in Denmark, Finland and Sweden should remain fixed, and that the challenges with high holdings in companies listed on the Oslo Stock Exchange should be resolved in whole or in part through Withdrawals from the Norwegian Government Pension Fund, “writes the Ministry of Finance.
“Retreats can be done in a number of ways, both as one-time retreats and annual retreats,” the ministry writes.
Specifically, the Ministry of Finance proposes to keep the fund’s participation in Denmark, Finland and Sweden unchanged at 15 percent of the fund’s portfolio.
They point out that the Petroleum Fund (the Government Pension Fund Global) already has investments in the Nordic region, and they believe that in isolation it is not effective to have two funds in the same market.
“Increased investment in the Nordic region through the Norwegian Government Pension Fund will reinforce this problem. Challenges with high ownership interests in companies listed on the Oslo Stock Exchange should, according to the Ministry’s assessment, be handled in whole or in part through withdrawals from the Norwegian Government Pension Fund, ”the ministry writes. .
You can charge 2.9 percent per year
Folketrygdfondet did not advise against an annual retreat in its letter to the ministry last year, but did not recommend it either.
The fund has not discussed how such a solution can be implemented, so the state as owner should consider it.
An annual withdrawal can be set at 2.9 percent of the capital, according to Folketrygdfondet.
In its letter to the Finance Ministry in December, the fund noted that the annual capital requirement on the main index on the Stock Exchange has been 1.1 percent, while the yield has been 4 percent.
– I do not want to reject an annual withdrawal or that there should be a limit on the size that Folketrygdfondet should be, the then chairman of the finance committee at the Storting Henrik Asheim (H) told E24 in December last year.
– For example, a limit can be set for the fund to be a maximum of NOK 200 billion, and the surplus is transferred to the Government Pension Fund Global (Oil Fund, journal.anm.) Every year, Asheim said.
Will require reports
A possible withdrawal of Folketrygdfondet will require studies, including the legal basis and consequences, the finance ministry notes.
– A withdrawal from the Norwegian Government Pension Fund will require further study. We will continue to work with the concrete design of the scope and framework for such a retreat to handle the challenge that Folketrygdfondet has taken up, in a good and appropriate way, says the Minister of Finance.
At the same time, the Ministry will consider whether Folketrygdfondet can be allowed to invest a little more in unlisted companies applying for a listing.
