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Norway brought in a new pension scheme for seafarers in 2020 which allows them to keep working and paying in for longer. Andrew Draper reports
The new Norwegian Pension Insurance for Seamen (PTS) scheme – which gives maritime professionals the option to keep working for longer – is based on pension contributions and is in addition to the basic state pension. It applies to those who have not turned 50 before 1 January 2020, as well as to all new members who register after that date.
Older and younger
The scheme is so new that no official data exists to show how many seafarers are, or are planning to, work for longer. But Miguel Rivas of PTS says his impression is that most enquiries are coming from younger seafarers who are expecting to work past the usual maritime pension age of 62. The state pension kicks in at 67.
'I think in general younger people, and not just seafarers, are more open to the need to work a bit longer,' he said. 'Not because they want to, but they say the pensions aren't going to be as good as now and the welfare state is not so sustainable, so they can't rely on that.'
Mariners in their 60s are generally enquiring about retiring soon rather than asking about working until they are 70. Older workers grew up with fewer working rights and more basic technology and equipment than younger seafarers, so they are more tired and ready to retire, he believes.
Another difference is that younger seafarers tend to start their pension savings at age 22-23, compared to those in their 60s who started when they were 16-17. Lifestyle is also a factor in determining retirement age, according to Mr Rivas. 'A lot of the older ones were drinking a lot when younger. It was part of working life. You never hear that from young people as part of working life now.'
What do you get?
Under the new scheme, employees' contributions are based on 1.7% of salaries up to NOK 1,276,788 (2021 level) and no longer based on rank. Employers put in 3.3%. Pensions will amount to 6.3% of salaries up to this level for every year of work until the age of 70.
The value of the pensionable months of seagoing service that seafarers earn earlier is added to pension pots when they turn 62, which is the earliest you can withdraw a Norwegian pension. The amount paid out in monthly pension depends on the size of the pension reserve at the time of withdrawing, and the length of time it is withdrawn for.
PTS states: 'The new scheme provides flexible withdrawal of pensions between the ages of 62 and 70. This means that you can choose freely when you want to start your pension withdrawal during this period. You cannot choose a shorter pay-out period than seven years, and no longer than until the age of 80.'