AFP - contractual early retirement pension
If you’re entitled to collect AFP, this benefit’s included as part of your retirement pension. There are big differences between AFP in the private sector and public sectors. In the private sector, AFP is a life-long compensatory allowance to the National Insurance Scheme’s retirement pension. In the public sector, AFP is an early retirement pension you can collect between ages 62-67.
AFP in the private sector is a collectively bargained pension plan; however, the fact that there’s a collective agreement in your company isn’t enough for you to collect AFP. There are actually several conditions that must be met in order for you to receive this benefit.
If you’re entitled to receive AFP, this benefit will make up part of your retirement pension. There are big differences in AFP in the private and public sectors. In the private sector, AFP’s a life-long compensatory allowance to your National Insurance Scheme pension. In the public sector, AFP is an early retirement pension that you can collect between ages 62-67 if you were born before 1963. For people who were born in 1963 and after, an AFP plan patterned after that in the private sector has been agreed upon.
AFP in the private sector
In order to be awarded AFP in the private sector, the following rule applies:
- No current earnings in AFP – all or nothing at withdrawal.
- The size of AFP depends on the salary you’ve earned between ages 13-61.
AFP withdrawal in the private sector
In order to make an AFP withdrawal in the private sector, the following rules apply:
- Life-long benefits that can be collected together with the National Insurance Scheme’s retirement pension.
- Can be collected from age 62 and must be collected by age 70
- Can combine penalty-free AFP withdrawals and working
- Must be withdrawn together with at least 20 % of the National Insurance Scheme’s retirement pension
Examples of AFP conditions with regard to age 62
- Being covered by a plan for a minimum of 7 out of the past 9 years
Examples of AFP conditions with regard to withdrawal
- Must have been covered by a plan for the past 3 consecutive years
- Must be employed
- Not allowed to receive disability pension after age 62
- Not allowed to receive pension, severance pay or other benefits (without a corresponding work obligation) the last 3 years before age 62 that equal more than 1.5 G.
All conditions must be met in order for you to be awarded AFP. For detailed descriptions of conditions for AFP in the private sector (in Norwegian).
It’s especially important to be aware of the fact that the rules which apply to a new AFP plan in the private sector are different from those in the old plan in several ways. That’s why it’s important that you educate yourself thoroughly about the conditions that must be met in order for you to receive AFP. It’s easy to make mistakes, and making the wrong choice can reduce your rights unnecessarily. Please contact Tekna’s legal department if you’re unsure of what you need to do in order to become entitled to receive AFP.
NAV calculates the size of your pension. You can log on to NAV’s pension calculator or call NAV’s pension center at telephone number +47 55 55 33 34.
You can apply for AFP and retirement pension electronically by logging on at NAV.
AFP is regulated in Articles for Joint Scheme for Contractual Early Retirement Pensions in addition to the Contractual Early Retirement Grants Act.