Recently, the Government Pension Fund Global announced its investment for 2023.
Let's first take a look at the performance of the Norwegian government's global pension fund in 2023.
1. Return on investment.
In 2023, the cumulative return of the Norwegian government's global pension fund will reach NOK 2,222 billion, which is about RMB 1,529 billion at the current exchange rate, with a comprehensive return of 16.1%.
2. Classification of ROI.
The Norwegian government's Global Pension Fund is heavily biased towards equity market investments, with 70.9% invested in equities, 27.1% in fixed income, 1.9% in unlisted real estate and 0.1% in unlisted renewable energy infrastructure.
In terms of investment targets of the Norwegian government pension fund, equity investments have the highest return of 21.3% in 2023, followed by fixed income investments with 6.1% and unlisted renewable energy infrastructure with 3.7%.
However, like other property markets around the world, the Norwegian government pension fund will also suffer a relatively large loss in 2023, with a return on investment in unlisted real estate of -12.4% for the year, which is 18 basis points lower than the return of the benchmark index.
3. The size of the pension fund.
As of December 31, 2023, the size of the Norwegian government's global pension fund was 15,765 billion kroner, which is equivalent to about 10.75 trillion yuan.
Judging from the investment yield of the Norwegian government's global pension fund in 2023, it can only be said to be eye-catching, with an annual return of 1,529 billion yuan.
As of now, the population of Norway is only about 5.46 million, which is equivalent to the average net income of 274,700 yuan per Norwegian in 2023 in the investment rate of the Norwegian government's global pension fund, and by the end of 2023, the per capita pension fund balance in Norway is as high as 1.9688 million.
If the base of the retired elderly is taken as a reference, the per capita pension fund balance is higher.
Up to now, the retired elderly in Norway are about 1.1 million, according to which it is estimated that the current per capita pension fund balance of the retired elderly in Norway is as high as about 9.77 million yuan, which can be said to be too much pension to spend!
According to the strength of Norway's pension fund, they can allow residents to retire early, but Norway's current legal retirement age is 67 years old, and the retirement age is relatively late. Of course, because of the strength of the pension fund, Norway currently allows eligible residents to apply for retirement and receive a pension early at the age of 62.
And from the actual situation, Norway's pension treatment is relatively good, and the current per capita pension in Norway is as high as about 13,000 yuan, ranking first in the world.
The reason why Norway can have the highest pension treatment in the world is mainly due to the good operation of the Norwegian government pension fund.
Like other countries around the world, Norway's pension system is made up of three parts: government pension funds, occupational pensions and personal pensions.
However, unlike some developed countries, occupational pensions and personal pensions account for the majority, Norway's government pension fund is the main force of their pension system.
According to the Norwegian government's pension system, people who work in Norway or have lived in the country for more than one year must join the system. Employees pay 7.8% of their pre-tax wages, while employers pay 14.1% of their pre-tax wages, which is similar to the current pension insurance in mainland China.
The pension insurance paid by employers and employees is remitted to the pension fund set up by the Norwegian Ministry of Finance, which is managed by the government.
The Norwegian government pension fund is divided into two parts, the first part is the Government Pension Fund Global (GPFG), which is not used to directly distribute pensions, but a reserve of the pension fund, which mainly invests in global assets outside Norway, and mainly focuses on some risk assets such as stocks.
The other part is the Government Pension Fund Norway (GPFN), which is mainly used to directly distribute pensions to retirees, and there are strict restrictions on the investment of this fund, more than 80% of which must be invested in some assets in Norway, and a small amount of funds will be invested in assets in some Nordic countries.
The two parts of the fund work together, and the GPNF is used to ensure the payment of daily pensions, and its assets are relatively small, with an asset balance of only about 300 billion crowns so far.
GPFG is mainly responsible for the preservation and appreciation of the pension fund, to put it bluntly, it is responsible for making money, because this part of the funds is not used for the issuance of short-term pensions, mainly for long-term investment, so most of these assets are invested in some stocks with good growth rates.
Although the world has entered the channel of interest rate hikes in 2023, the stock market performance of many countries is still very bright, and in this context, the Norwegian Government Global Pension Fund has also achieved very rich returns.
According to the 2023 Norwegian government's global pension fund size and rate of return, its annual cumulative return on stock investment will reach at least about 1.33 trillion, and the income from stock investment alone is close to 1/3 of Norway's GDP.
The operation of the Norwegian government pension fund is still worth learning from many countries, and if you want to ensure the ability to pay for the pension, you can't rely solely on the contributions of the working people to pay the pension of the retired elderly, but through reasonable investment, to ensure the appreciation of wealth, which can ensure that all people have a considerable pension after retirement.