Independent municipal pension funds in Norway achieved a higher return than the dominant provider KLP in 2024, building on last year’s outperformance, with an average 9.4% investment gain versus KLP’s 9.0%, according to the pension funds lobby.
The Norwegian Pension Fund Association (Pensjonskasseforeningen) said figures obtained from its municipal pension fund members revealed a weighted and non-weighted average return on the funds’ collective portfolios of 9.4%.
Christer Drevsjø, chief executive officer of the lobby group, said: “The return shows that the pension funds continue to deliver, and that the asset management strategies are well-balanced.”
He added: “The good performance is not a result of one-off events. Over time, the pension funds have better returns. This is partly due to the high equity allocation in the management.”
One of Norway’s largest municipal pension funds, the NOK12.2bn (€1.05bn) Oslo-based pension fund for the counties of Akershus, Buskerud and Østfold (Pensjonskassen for Fylkene), posted a 10.5% return for 2024, also citing its higher equity allocation as reason for outperforming KLP, saying it was solid enough to maintain that allocation even in a falling financial market.
Bjarne Refsnes, the fund’s CEO, said: “We are pleased to be able to contribute with good profits to the county municipalities and our associated businesses in a very challenging economic time, while at the same time continuing to deliver a good personal service to our members.”
Pensjonskassen for Fylkene said its financial development had also been stable in terms of risk results and disability development, with the risk result standing at a positive NOK39m — compared to a negative NOK210m in 2020.
“As in previous years, this is due to the fact that there are lower disability withdrawals in Pensjonskassen for Fylkene than in the local government sector in general,” it said, comparing this to KLP’s figures which it said showed a negative risk result for disability for the second year in a row.
KLP on Monday reported a 9.0% return on its common portfolio for 2024, or 8.7% taking value changes in hold-to-maturity bonds and lending into account.
Total assets increased by NOK76.8bn over the year to NOK863.9bn, it said.
KLP said its risk result – expressing how mortality and disability developed in the insured population in relation to assumptions used to set premiums – was NOK790m last year, up from NOK648bn the year before.
KLP cited two factors that had increased disability provisions in both 2023 and 2024, namely a backlog in the granting of disability pensions, and the fact that disability levels have been high both in KLP’s insured population base and society generally since the pandemic.
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