Advice and Tips
You yourself can now choose where you want to place your employee pension, and management company Kron is offering Tekna members a great deal.
Until now, you’ve had both the advantage and disadvantage of not being able to choose where your employer saves your pension for you.
This has been a good arrangement for many people, because they’ve been spared having to spend time scouring the market for the best pension providers. But being able to choose their pension provider themselves will profit many workers.
– Your employer may have chosen a pension provider for different reasons than you would have done. Maybe it was because of their fees or because they had the best invoice service? Maybe your employer has chosen poorly performing funds and/or fund managers, or has invested in funds you don’t believe in and can’t endorse? Well, now you can choose a provider all by yourself.
So says Håvard Solheim, investment consultant manager in Kron, a mutual fund management company with over 20 years of experience in financial analysis and fund selection.
In 2021 you’re free to choose where you want to place your pension. Your employer will continue to pay fees, but you’ll start getting the difference from your current pension provider and the new one deposited directly into your pension savings account.
– Let’s say that your pension savings costs your employer NOK 1,000 per month with your current pension provider, and that we at Kron take for example half of the management fee, so you get the difference of NOK 500 as extra savings. That adds up to NOK 6,000 per year – which you’ll get a return on, and it’ll grow even more over the years.
Let’s look at another savings example:
Marie (30) is employed in the private sector and has an employer-sponsored pension investment plan. Her employer saves 5% of her annual income in a pension savings account and pays in addition the fees charged by her pension provider.
Marie looks at finansportalen.no and sees that by moving her pension to Kron, she’ll get a .23% lower management fee than the one her employer has chosen.
An employer is obligated to pay the management fee on active pension capital. This means that Marie will get the difference – in other words, the sum that comprises .23% of the active pension balance, paid directly into her pension savings account as extra savings.
Based on the assumption that Marie will earn the average salary for Tekna members throughout her career, changing jobs three times, working until she is 67 years old and taking out her pension over a period of 10 years, she will be paid NOK 1,700 more in her monthly pension as a pensioner, which adds up to NOK 204,000.
If you currently have a good pension savings plan that you’re satisfied with, you don’t have to do anything. Yet it’s still important that you look at the big picture when deciding where your pension savings account should be placed. Maybe you’re not necessarily saving a lot on fees, but maybe you’d like to move in order to get a larger fund selection and better user experience?
– We want you to have an active relationship with your pension, both with regard to how much your employer is saving and how much you should save on your own. This is important no matter if you work in the private or public sector and what kind of pension savings plan you have.
Solheim advises you to check out Norsk Pensjon’s webpages to see what your existing pension savings plan costs and what your payout will be as a pensioner.
– Now you have the opportunity to make your own choices and have a greater degree of control. You should grab this chance. It’ll lead to your getting a much better pension, he says.
As a Tekna member, you receive many professional and financial benefits. We may help you with your salary, career and professional development and legal challenges. You get access to one of the country's best banking and insurance deals which can save you a lot of money. Becoming a Tekna member is a good idea!
Solheim thinks that most people will profit from moving their pension savings plans, and this is especially true for Tekna members who move theirs to Kron.
– We give Tekna members a very good deal. Our aim is to be better than any other company out there, and our advantage is that we’re not an «old» company. We can create a pension savings plan designed for this century, which is very advantageous for our customers.
Because of Kron’s low management fees, you’ll be able to get several thousand more kroner in your pension account by moving it to Kron.
– The surest bet for getting the best return is always cheaper management. And the younger you are, the more you’ll get out of the deal, says Solheim.
Kron also describes itself as a different kind of pension provider. They want to make pensions more interesting, and so they focus on consulting and management.
– We can increasingly choose funds freely from other providers that we think are good and negotiate to lower the costs for our customers, says Solheim.
If you want to save more than what your employer’s saving for you, Kron offers mutual fund savings plans and IPS for very reasonable costs. This offer also applies to people who can’t have their own pension savings account or pension capital certificate at Kron.
If you want to switch to Kron, we have a separate Tekna page where you can do this. According to Solheim, the entire process takes four minutes.
– These are well-paid minutes that can give you several thousand kroner extra in your pension, he says.
Your pension is comprised of three parts: National Insurance, employer contribution and your own savings. The last will only become more important, especially for people in their 30s and 40s because they’ll get paid a lot less from the government than previous generations.
Employees’ annual savings can grow due to this development, especially over several years. It’s therefore smart for you to start saving for your pension as soon as you can.
When wanting to figure out how much you should have in your pension, you should think about what you want to do as a pensioner. Do you want to take it easy, or do you dream of traveling a lot, paying off all your loans and living more comfortably than you do today?
Take the pension test! You can see how much you should save for your pension using the Kron app. You answer several questions and get a recommendation as to how much you should have in your pension. You’ll also see what other people in your situation are saving. You can’t save more than what your employer is saving for you, which is a maximum of 7% annually up to 7.1 G. If you want to save more than what your employer is currently saving for you, you can set up your own pension savings account with highly favorable conditions at Kron.
