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Pensions are not guaranteed by high oil prices

Our pensions are not secured for all eternity because of the high oil prices, stated Minister of Finance Per-Kristian Foss.

In an interview with the Norwegian daily Aftenposten, Foss rebuts the statements by Stein Reegård, head economist at the Norwegian Federation of Trade Unions. Reegård claimed that the calculations conducted by the government appointed pension commission are outdated. According to Reegård’s calculations, in 2050, the oil fund will be twice the size the pension commission based their calculations on due to the high oil prices.

«The fact that we manage to cover the pension expenses we have today and for some years to come, is not an indication of how it will be in the far future,» Foss said.

Foss stated that the main problem is that we live longer and work less.

«A difference in the oil price of NOK 30 to 40 (USD 4.4 to 5.9) per barrel is still not a great difference in comparison to the demographic challenges,» Foss said, who stated that there is a need for considerable cutbacks in Norwegian economy in order to manage to cover the pension payments in the future.

If we use too positive predictions, it may lead to massive cutbacks that hits suddenly and brutally, in stead of them being instituted gradually over time, Foss concluded.

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