Norway appeals armed forces’ pensionable allowances decision

The Norwegian state has appealed to the country’s Supreme Court in relation to a case concerning the pensionable allowances of those in the armed forces.

A statement on the Norwegian Public Service Pension Fund (SPK) website states that it is appealing the decision because the two previous court cases reached different conclusions. It also said the most recent ruling, by the Court of Appeal, makes it “difficult to assess what should be pensionable income in addition to fixed salary”.

“Nobody benefits from such uncertainty, and therefore we are appealing the judgment to the Supreme Court,” SPK stated.

The case involves two defence employees who took legal action against the state to have watch and vessel allowances included in the pension basis for the old-age pension provided by SPK. The case has been heard by the Social Security Court and then in the Gulating Court of Appeal.

“According to the agreement on working time regulations for the armed forces (ATF), the supplements are compensation for overtime. Overtime is not pensionable income according to the Norwegian Pension Fund Act. However, the Court of Appeal concluded that vessel and watch allowances should be considered fixed pensionable allowances. Here, the Court of Appeal and we disagree,” SPK legal director, Rune H. Kristoffersen, said.

SKP argues that the Act on the State Pension Fund (Section 11) sets out in law which income is eligible for pension accrual. Fixed income is pensionable and although supplements can be included for the pension basis under certain conditions, overtime is not pensionable in the State Pension Fund.

In the armed forces, the agreement on working time regulations defines how employees are compensated for work beyond normal working hours. Vessel and watch allowance, which is part of this agreement, applies to work beyond normal working hours and is compensated with salary and time off.

“The employer does not report watch and vessel allowances as pensionable income to us. Nor has the armed forces paid a pension premium and the employees have not deducted two per cent member contributions to SPK from the supplements,” Kristoffersen said. “In other words, the supplements are not treated as pensionable over the years.”

Furthermore, he argued that the Court of Appeal’s judgment is too general based on the wrong legal basis.

“It is important to distinguish between pensionable income in the national insurance, pension base in the private sector and what is pensionable under the Act on the State Pension Fund. The judgment is largely based on a previous Supreme Court judgment on the interpretation of the act on company pensions, which applies to the private sector.

“In addition, the judgment does not define the distinction between what is pensionable income in SPK and what falls outside it. All this creates uncertainty in how we should interpret the regulations, and how we calculate the correct pension for the members and the correct premium for the employer. Therefore, we believe the Supreme Court should decide the case.”

The government attorney will conduct the case on behalf of the state.

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