Norway's KLP has announced it will transfer NOK 26bn to its owners’ premium fund this year, providing a significant contribution to local government and healthcare pension customers.

The contribution, based on strong financial results, is around double the previously forecast amount and represents the second-highest sum ever distributed to customers by KLP.

It is only surpassed by last year’s record contribution of NOK 37bn.

KLP chief executive officer, Sverre Thornes, said the allocation reflected both solid returns and a strengthened financial position.

“We aim to transfer NOK 26bn to the owners’ premium fund this year.

"It is a great pleasure to inform you that this is around twice as much as we have previously predicted for our customers, who are also our owners,” he continued.

“At the same time, we are strengthening our solvency, which lays a good foundation for good returns in the future.”

Thornes added that the scale of the contribution underlined the value of long-term investment management.

“Good contributions to our clients over time demonstrate the value of good, long-term asset management,” he claimed.

Funds held in the premium fund can be used to cover future pension payments, helping to reduce pension costs for customers while also improving their
liquidity.

The final allocation to the premium fund will be decided in March, following the board’s consideration of KLP’s annual accounts.

The transfer of funds is expected to take place during the second quarter of the year.

Thornes stressed that KLP was keen to provide early visibility to customers, even ahead of the final accounts.

“We know that information about how much is being added to the premium fund is important to our customers.

“That is why we are committed to sharing this information early, even if final accounts are not available,” he concluded.

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