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The desire to increase current pensions already this year has become a headache for the parties in the Storting. The solution may be a “Christmas present” in the form of a lump sum.
FRP and SV have invited the other parties to a new pension agreement and one of the demands is to increase pensions already this year. The two parties want both to raise the minimum pensions and to change the current pension regulation to an average price and wage growth.
Both proposals have a majority in the Storting. However, if the changes are introduced at the end of the year, several parties fear a cascade of consequences that are difficult to foresee.
– It does not depend on the will, but the nightmare now is to start something of which we do not fully see the consequences at the end of the year, a source tells NTB.
As of September 20, 2020, there were a total of 140,000 minimum pensioners in Norway, according to Nav. The total number of retirees in June 2020 was 910,000 according to Statistics Norway.
Nav warns
A restructuring and increase of pensions may, among other things, have consequences for other pension plans, taxation, the right to early retirement and the payment of other benefits, such as housing benefits.
Nav warns in a letter to the parties about the consequences of introducing schemes that give retroactive effect.
If the parties decide to introduce a new regulatory model for pensions, about 1 million cases will need to be regulated again, of which at least 25,000 cases will need manual processing, Nav says.
– There is a significant difference between whether cases are converted into effect from time to time or go back in time. There is a significant risk of errors after conversion and delays if cases are to be regulated in time and already regulated benefits must be regulated at new rates. A job of this magnitude will in all likelihood affect the ability to perform other required jobs in 2021, the agency warns.
Considering the Christmas present
The parties are now looking for unique possible solutions that do not lead to a high risk of consequential problems. One possibility that has been discussed is to give minimum pensioners, or possibly only single minimum pensioners, a one-time payment as a kind of Christmas bonus.
However, the Christmas present can probably only be paid for in the summer, as Nav calculates a six-month payment period.
A new negotiation meeting was held at the Storting on Tuesday, but the parties are currently very far from a solution, NTB reported.
– We are looking for a unique solution that can fly, says a source.
The Finance Committee presents its recommendation for the newly aging budget for 2020 on Wednesday, where the latest additions and changes to this year’s budget will come.
In NTB’s experience, there should be no solution for pensions in such an environment. A possible solution will come more like a so-called flexible proposal later in the week. The last deadline is Saturday, when a vote will be taken on the new 2020 budget balance.
Negotiations on future pensions will continue into the new year. FRP’s labor and social policy spokesman Erlend Wiborg told NTB last week that he believes the parties will reach an agreement in early February.
(© NTB)
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