Advice and Tips
The ultimate checklist for your pension
Taking a few easy steps can mean a lot for the amount of your pension when you retire. This checklist gives you a step-by-step explanation of what you should do to make sure you’ll get a good payment.
Having your own pension account makes it easier than ever to access information about your pension, and what you do with it is completely up to you. For example, you can switch providers, thereby getting a better deal than the one you have with your current employer.
– If you set aside a little time now to get an overview of your pension, it can mean a lot for your financial situation later on, explains Line Henriette Holten, Tekna’s general secretary.
But where should you start? Take these steps to quickly gain control of your own pension plan.
Step 1: Take Kron’s pension test to get an overview
Your pension is the money you’ll live off of when you quit working. This money comes from the Norwegian national social insurance plan and is paid out by the Norwegian Labour and Welfare Administration, as well as your current and previous employers. You can also save money on your own.
Start by finding out how much you can expect to get from your pension – and how much you’ll need.
The website Norsk pensjon gives you an overview of your pension, including money from the Norwegian national social insurance plan, private job-related pension plans and your individual agreements.
If you work in the private sector Krons pensjonstest gives you a rough indicator of what you’ll get paid from your pension. You can also make a comparison here of the actual payments you can expect to receive. You’ll also get tips about what you should do to ensure that you get an even better pension.
If you work for a municipality, you can check on your pension at KLP. If you’re a government employee, you can get information about your pension at Statens pensjonskasse.
Step 2: Find out if you should switch providers
Having your own pension account gives you the opportunity to transfer your current account to another provider.
You can see which provider will give you the best terms at finansportalen.no. Choose a provider with low administration and management fees. If you choose a company with lower fees than you have with your current employer, you’ll be compensated for it.
Doing so can save you a lot of money every year, explains Holten. And Tekna’s entered into an agreement with Kron that gives Tekna members very competitive terms.
– If you still have several years of working ahead of you, it can mean large sums of money in the end. As a Tekna member you’ll get a great deal with Kron, and we at Tekna will make sure that you continue to have the best terms over time, she says.
Let’s look at an example:
Marie, who’s 30 years old, has an employer that saves five percent of her annual salary towards her pension, in addition to paying the pension providers’ fees. Marie goes on finansportalen.no, and sees that by moving her pension account to Kron, she’ll get a .23 percent lower management fee than the one her employer has chosen.
The employer is obligated to pay a management fee on the active pension capital. This means that Marie will get the difference, in other words the sum that makes up the .23 percent of the active pension balance, deposited directly to her pension account as extra savings.
Based on Marie’s earning an average Tekna member’s salary throughout her career, changing jobs three times, working until she’s 67 and taking out her pension over ten years, she’ll get paid NOK 1,700 more in her monthly pension when she retires, a total of NOK 204,000.
Step 3: Check if you have the right share amount
As a rule, pension savings consist of both bond funds and equity funds. While investing in bond funds is more secure, it potentially yields lower returns. Conversely, while investing in equity funds yields a higher rate of return, doing so is more unpredictable.
If there’s a lot of time until you’ll be a pensioner, it may be smart to have a large share of equity funds. If you’re soon retiring, it may be most sensible to have a large share of bond funds.
You can make changes yourself, independent of where you currently have your pension account.
Step 4: Start saving privately
How do you want to live as a pensioner? Many people have a wish to maintain a high standard of living. If so, it may be smart to save your pension on your own in addition to your job-related pension plan and the Norwegian national social insurance plan.
To repeat, it’s useful to think that even a small amount saved per month can become a large amount over time.
Step 5: Get good advice
Do you think that dealing with your pension is difficult, and you’re unsure about what is the best plan for you?
On Tekna’s own webpage at Kron you’ll find answers to the most commonly asked questions about pensions, and we absolutely recommend using the chat function as Kron stakes its reputation on providing you with fast and good answers to whatever it is you want to know.