Pension (Stabilization) Fund of Norway

Main article: Norway

The Stabilization Fund in Norway is called the Pension Fund, since its main task is to cover the growing budget expenditures in the context of an aging population. At the same time, the country's authorities have repeatedly spoken about their intention to reform the pension system in such a way as to make the state's obligations more moderate. The principled position of the Norwegian authorities is as follows: the costs of the state treasury should be covered by taxes, and oil money is nothing more than a reserve for an "extreme case."

Norway's pension fund should not be confused with foreign structures with a similar name, such as the Russian Pension Fund (PFR). The latter accumulates taxpayer insurance premiums and distributes them among pensioners, carrying out state pension insurance. To perform the same functions in Norway, there is a separate structure - the State Pension Fund, which was formerly called the National Pension Insurance System.

How the fund is filled

Norway's pension fund is filled with taxes from oil corporations, revenues from the sale of fields and dividends to Statoil, which is majority owned by the state. With about 90 percent of Norway's budget spending coming from taxes, most of the revenue from the oil industry goes to the Pension Fund. As a result, the size of the fund is constantly growing. Less than ten percent of the fund's revenues can be spent on state budget expenditures.

How to manage

Norway's oil fund is run by a division of the Central Bank - Norges Bank Investment Management (NBIM), which coordinates its policy directly with the Ministry of Finance. In 1998, the fund gained the right to invest up to 40 percent of its funds in foreign stocks and bonds. In 2009, this bar was raised to 60 percent, and in 2010 it was allowed to invest up to five percent of resources in real estate. In addition, the fund invests in currency. At the same time, the government has compiled a "black list" of companies in which the fund cannot invest due to ethical considerations. First of all, we are talking about manufacturers of tobacco and weapons, as well as corporations involved in corruption or violating human rights. For example, the world's largest retail chain Wal-Mart was among the latter. It is noteworthy that there is not a single Russian company on this list.

Fund size

2023: Sovereign wealth fund assets - $1.375 trillion

The largest sovereign wealth funds in the world in 2023

2022

Record losses amid conflict in Ukraine - $164 billion

Norway's largest state investment fund, Norges Bank Investment Management, $1.3 trillion in January 2023 , reported its biggest losses since the 2008 financial crisis.

Fund losses for the entire 2022 amounted to $164 billion. The fund lost 15% on stocks and 12% on bonds.

$1.339 trillion

The Norwegian pension fund is "richer" than the 10 richest people in the world combined.

As of 2022

2020: $190K for each Norwegian

As of May 2020, at the rate of each Norwegian, the fund contains 190 thousand dollars.

2019

As of December 2019

2013:1% of the planet's financial savings

As of January 2013, Norway's Stabilization Fund is the largest in Europe and accumulates about one percent of global financial savings.

$650 billion

By September 2012, the size of the fund had reached $650 billion, up from $220 billion in 2006. It is expected (January 2013) to exceed the trillion-dollar mark by 2020.

History

2023: The volume of assets hanging in Russia decreased to $330 million

The Norwegian National Welfare Fund in March 2023 announced that it was not able to withdraw its funds from Russia. At the end of February 2022, the fund announced plans to exit Russian assets, but did not have time to fully sell them due to the ban on transactions for foreign investors. By the end of the first quarter of 2023, the volume of Russian assets of the fund decreased to $330 million.

2022

Foundation faces massive cyber attacks

At the end of August 2022, hacker attacks became the main problem for the world's largest sovereign wealth fund with assets of $1.2 trillion - the Norwegian National Wealth Fund.

Norway's sovereign wealth fund was established in the mid-1990s to invest revenues in the oil and gas industry. As of August 2022, the fund owns about 1.5% of all shares of listed companies in the world, under its management are assets worth $1.2 trillion.

Norway's sovereign wealth fund with $1.2 trillion assets faces massive cyber attacks

The Norwegian Foundation faces an average of three attacks a day, which are classified as serious. The number of attacks per year reaches 100 thousand, of which more than 1 thousand are regarded as serious. Nikolai Tangen, executive director of the fund, told the Financial Times about this. From the beginning of June to the end of August 2022, the number of cyber attacks aimed at the financial industry increased sharply.

According to to data INFORMATION SECURITY SonicWall, in the first half of 2022, the number of attacks around the world increased by 11%, but banks in financial institutions they doubled. At the same time, ransomware attacks decreased by 23% worldwide over the same period, but increased by 243% in relation to financial goals. SonicWall Executive Chairman Bill Conner said that countries such as Russia,,, and China Iran North Korea most often support hackers. However, the Financial Times notes that hackers can also act in private groups.

On August 21, 2022, the Norwegian sovereign wealth fund reported record losses in the first half of the year. In January and June 2022, fund losses from investments amounted to 14.4%, or $174 billion. The fund lost money on both stocks and bonds. Tangen explained the fall by the influence of Russia's military special operation in Ukraine, as well as rising interest rates and high inflation.^[1]

Loss of $174 billion in the first half of the year

The world's largest Norwegian sovereign wealth fund lost $174 billion in the first half of 2022. The $1.3 trillion fund made a negative 14.4% profit during the reporting period as stocks and bonds reacted violently to fears of a global recession and soaring inflation.

Loss of $74.2 billion in the first quarter

The Norwegian Sovereign Wealth Fund, the largest in the world, reported a loss of $74.2 billion in the first quarter of 2022, as the conflict in Ukraine and other global events hit stocks and bonds.

2020: The first sale of assets in the history of the fund due to the COVID-19 epidemic

In May 2020, it became known that the Norwegian Pension Fund, the largest state fund in the world with a volume of more than a trillion dollars, will be forced to sell assets for the first time in history. The organization had to take extreme measures due to the fact that the state's needs for money due to the COVID-19 epidemic exceeded the amount it receives from dividends and interest.

The organization owns about one and a half percent of all shares in the world. In early April 2020, it suffered losses of $113 billion due to the collapse of the share price.

1970s-2006

Oil in Norway began to be produced back in the 1970s, but a fund that would accumulate funds from the sale of hydrocarbons in the event of a drop in budget revenues was created only in 1990. Initially, the structure was called The Petroleum Fund of Norway, but in 2006 it was renamed the Pension Fund. The authorities also decided to add oil revenues to the "money box" because of the conviction that the increase in budget expenditures due to money not earned by citizens would lead to inflation and overheating of the economy.

Notes