NORWAY - Norwegian pension funds had a combined deficit of NOK4.7bn (€560m) in 2008, according to latest figures from Statistics Norway.

The annual update on 'private and municipal pension funds - based on pension funds' balance sheet and profit and loss accounts for 2008 - revealed earnings for these schemes declined for the first time since 2002.

Premium income fell from NOK19.1bn in 2007 to NOK16.7bn in 2008, equivalent to a drop of around 14.4%. The national statistics agency attributed this negative revenue to a "weak performance in the securities market" over 2008. It revealed this decline in the market "led to losses on financial assets of almost NOK21bn".

This meant pension funds had a NOK4.7bn deficit in 2008, compared to a NOK5.5bn surplus in 2007. And at the end of 2008, the figures showed the total assets for pension funds fell 4.4%, or NOK7.5bn, to NOK162bn.

In addition, the statistics revealed investments in "subsidiaries and other shares, participation and primary capital certificates" fell by NOK20bn over the year. These investments accounted for around 32% of total pension scheme assets, which is a 10% drop from 2007. In contrast, pension scheme holdings of bonds increased by NOK12.3bn, to reach 57% of total assets, while the remainder invested in other financial instruments.

However, Statistics Norway also said new annual accounting regulations for pension funds, introduced in January 2008 alongside new regulations for pension funds, have had "an impact on the content and presentation of the pension fund statistics". Therefore it warned, "the statistics from 2008 cannot be compared with those from previous years".

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