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All public employees pay 2% of their annual income to the pension fund. This is...

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Accounting

All public employees pay 2% of their annual income to the pension fund. This is money you gradually get back as a pensioner. Ole has an annual income of NOK 700,000. 

How much does he pay into the pension fund each year? 

Ole has paid this in for 40 years. Ole will retire when he is 67 years old, and the life expectancy for men is 82 years. The pension must be paid evenly over the expected remaining years of life. 

How much does he receive from the pension fund each year? In this, we disregard salary increases and interest.


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