Rotary World Service - District 5950 Group Study Exchange 2003

 GSE Trip Home

 Meet the Team
Introducing the team members to you.

Photos: click a photo to see it full size. Use your browser BACK button to return to the journal page.

Contact the Team
The GSE team to Norway would like to hear from you.
Please e-mail us:
Mike Morris
John Hobday
Margit Karkela
Lynn Keillor
Alanna Simone Tyler

THE TRIP
April 22-23 - Days 1-2
April 24 - Day 3
April 25 - Day 4
April 26 - Day 5
April 27 - Day 6
April 28 - Day 7
April 29 - Day 8
April 30 - Day 9
May 1 - Day 10
May 2 - Day 11
May 3 - Day 12
May 4 - Day 13
May 5 - Day 14
May 6 - Day 15
May 7 - Day 16
May 8 - Day 17
May 9 - Day 18
May 10 - Day 19
May 11 - Day 20
May 12 - Day 21
May 13 - Day 22
May 14 - Day 23
May 15 - Day 24
May 16 - Day 25
May 17 - Day 26
May 18 - Day 27
May 19 - Day 28
May 20 - Day 29

Thursday, April 24
Drammen, Norway

Today we had an opportunity to experience our first vocational day.  The Drammen Vest club was kind enough to match us up with our own vocational counterparts in Norway. 

Since we were all on our own for the day, we have not yet had a chance to debrief.  The schedule of events included the following:

• Lynn visited the local newspaper editorial desk and in the afternoon she visited her host Arne’s son who works at the sports department for the Norwegian Broadcasting Cooperation.

• Alanna visited the Buskerud County Administration located here in Drammen.

• John visited the Municipal Health and Care Administration.

• Mike visited a local family physician and the Buskerud County Hospital.

Hopefully they will all have an opportunity to share some of what they have learned in future journal entries. 

I travelled to Lysaker today with my host Anne-Grethe Falck.  Anne-Grethe works for the Aon Grieg Norway Energy division as the business controller.  After introductions to her co-workers and a brief overview of Aon, which is based out of Chicago, I was introduced to Gudleik Njå.  Gudleik works to set up pension plans with institutions.  It is a small niche within Norway and most contacts are made originally through cold calls.  This division of Aon is only about four years old, and they have made a good deal of progress building recognition with in the market. 

As I mentioned to Gudleik, I was very interested in the tax structure in Norway and how that affects individual’s retirement savings.  It is my understanding that the individual is typically taxed at 50%.  On top of that there is a 24% value added tax (VAT) on purchases.  Businesses as well will pay a tax typically 16%-28% on top of the salaries they pay. 

There is a retirement plans covered by the government called folketrygd.  The normal retirement age according to the government here is 67 year old.  The max pension is 150,000 Nok, which is less than $20,000.  To supplement retirement income, companies also sponsor a defined benefit plan.  To get maximum benefits you must work 30 years and your pension is based on your last 5 years salary.  However within this plan there is a maximum that is tax deductible.   

Early retirement causes several problems.  Not only will they receive lower folketrygd and defined benefit income, but they must also have to fund the years privately before they reach age 67.  There are some government plans designed to help those who retire early due to a disability or who do not work.  These plans, however, are a minimum pension and are not ideal. 

The folketrygd is a pay as you go plan, similar to our social security system.  Norway is also experiencing a change in the demographics; however Gudleik doesn’t think it will have the same potential problems that our plan has as it could be backed by the taxation on the petroleum company profits.  Their taxes are currently 78% and this money is being saved by the government. 

There are some individual retirement plan options including IPA (Individual Pension Agreement).  This plan sounds similar to our IRA (Individual Retirement Accounts).  There is a maximum contribution of 40,000 Nok per year, grows tax deferred, and is taxable upon distribution.  Mutual funds are also a source for additional funding, however it sounds like many people leave their excess funds in the banks which are currently paying about 5% - not bad for the current market situation. 

Always looking for efficient tax strategies, I asked Gudleik are there any tax breaks.  There are of course.  As business owners, there are options to write off certain expenses.  Property rentals also provide a good income source as well as a tax deductions on mortgage interest payments, provided that you rent less than half of the structure.  Dividend interest also is taxed at a lower interest rate of 28%. 

I also asked Gudleik about people’s attitudes towards paying such high taxes.  Throughout our stay here I have heard people comment that they are happy to pay their taxes.  This is certainly not an attitude I have experienced in the States and I can not tell if people really mean it or if it a sarcastic comment.  Gudleik confirmed that while many think the taxes are high, they have come down and people in general are very happy with the benefits provided.  Currently medical, university, retirement, some day care, and even 9 months to a year off to stay home with a newborn are some of the benefits provided.  He suggested that to really see the cost of the tax you have to add up similar costs from other countries to make an accurate comparison.  It is certainly a different cultural attitude. 

All in all it was a very informative day and has brought up many follow up questions that I am anxious to explore in our next vocational days. 

I finished my day as a typical single women living in this country may do, Anne-Grethe and I joined fellow Rotarian Elsa at the local gym.  We attended a yoga class and it was quite relaxing.  I am very thankful, however, that my good friend Michelle has introduced me to yoga in the States as it would have been much harder to follow without knowing much Norwegian or basic yoga moves. 

-Margit Karkela