Additional pay for vessel and watch service is included in the pension basis for employees in the Coast Guard

Two former employees of the Coast Guard brought a case to the National Insurance Court, which was subsequently taken to the ordinary courts. They claimed that their pensions were calculated on an incorrect basis, as significant vessel and watch service allowances received during their service were not included in their pension basis. They principally argued that this follows directly from section 11 subsection 1 of the Norwegian Public Service Pension Fund Act. Alternatively, their claim was based on section 11 subsection 2, which states that the pension basis for people with varying incomes and allowances is determined by a collective agreement. In this context, Appendix 4 of the Main Collective Agreement in the State was invoked.

The Court of Appeal fully supported the employees. The Supreme Court, like the National Insurance Court, found that section 11 subsection 1 of the Act does not cover the relevant allowances, but that they should be included in the pension basis according to the rules in section 11 subsection 2 and Appendix 4 of the Main Collective Agreement. The ruling is based on the wording of the relevant provisions, along with legislative history and practice from the Public Service Pension Fund and National Insurance Court .

Appendix 4, which applies to the parties in this case, stipulates that the pension basis for total allowances cannot exceed NOK 66,000. Appendix 5 applies to accruals under the new public service pension scheme from 1 January 2020 and is identical to Appendix 4 but without the monetary limit.

The judgment was handed down with a partial dissent. Two justices believed that the inclusion in the pension basis follows from Section 11, Subsection 1, of the Act.

The case clarifies the interpretation of the rules for determining the pension basis in the Norwegian Public Service Pension Fund Act and the Main Collective Agreement in the State.

Read the judgment from the Supreme Court (Norwegian only) (PDF)

Area of law: Pension. Section 11 of the Norwegian Public Service Pension Fund Act.

Key paragraphs: 72-73, 94-101, 106

Justices: Ringnes, Arntzen, Bergh, Thyness, Lund