innskuddsbasert

Innskuddsbasert is a Norwegian term describing something that is based on contributions or deposits. In many contexts it is used to refer to defined-contribution pension schemes, where the size of the future benefit is determined by the accumulated contributions and the investment returns on those contributions, rather than by a fixed formula.

In the pension context, innskuddsbasert means that both the amount paid into the plan (by the employee and often by the employer) and the returns earned on these funds influence the final retirement benefit. The benefits are not guaranteed to a fixed amount; instead they depend on the level of contributions, the chosen investment strategy, fund fees, and market performance. A key feature is that the pension pot is typically recorded on an individual account or within a fund pool, and the accumulated capital can be portable when changing jobs.

Advantages commonly associated with innskuddsbasert arrangements include greater transparency and portability between employers, along with the potential for higher returns in favorable markets. The main risk is investment risk, which is borne by the participant, leading to uncertain final pensions and dependence on market conditions and fees. This contrasts with defined-benefit (definert ytelse) schemes, where the pension is linked to salary and years of service and carries a guaranteed level of benefit.

Outside pensions, innskuddsbasert may describe any arrangement funded by contributions rather than a pay-as-you-go or other model. The term underscores the role of deposits and investment performance in determining outcomes.