Politics can make for strange bedfellows, like when Norway’s right-wing Progress Party and left-wing Socialist Left party agreed last week on a pension pay compromise. In this case, it means retirees may be able to sleep better at night.
The agreement quickly won support from the Labour- and Center parties, meaning they can now all form an unusual majority in Parliament to boost pension payments over the objections of the government. It stands to force the government to change the system for “adjusting” pension pay.
For many years, retirees have received 0.75 percent less than what’s determined to be annual, general pay hikes for employees. In recent years, it’s meant that retirees have lost purchasing power, since low pay raises minus the 0.75 percent have left retirees with an increase lower than the cost of living.
Now they’ll receive a pay raise equal to an average of pay- and price growth. That will ensure retirees a raise that’s at least slightly above the inflation rate, as long as workers get pay raises above it, too.