Equity Portfolio Goes All-In on Funds
Equinor Pension has completed a strategic shift in its equity portfolio, moving entirely from individual investments to fund investments. This process concluded in the fall of 2024, meaning that as of the end of fiscal year 2024, the equity portfolio consists solely of investments in equity funds. This change aims to streamline management and potentially enhance diversification. The equity share in the collective portfolio is capped at 40% of financial assets excluding real estate. (Source: Directors’ Report 2024, page 39)
Buffer Fund Bolstered by NOK 4.2 Billion
In fiscal year 2024, Equinor Pension significantly increased its buffer fund by NOK 4.2 billion, bringing the total to NOK 16.9 billion. This increase is a direct result of the introduction of new rules from January 1, 2024, regarding a merged and customer-distributed buffer fund for private schemes. The buffer fund replaces previous additional statutory reserves and market value adjustment reserves, aiming to strengthen the fund’s solvency and provide a more balanced and appropriate management structure for a maturing pension fund. The buffer fund can be utilized to cover future negative financial results and certain actuarial basis changes. (Source: Directors’ Report 2024, page 39, Note 19, page 61)
Currency Hedging Ratio Adjusted to 20%
As of the end of fiscal year 2024, Equinor Pension’s currency hedging ratio for the equity portfolio stands at approximately 20%. This ratio is dynamic and will vary in line with the fund’s risk-bearing capacity. The bond and money market portfolio, however, maintains a 100% currency hedging. (Source: Directors’ Report 2024, page 39)
Strategic Focus on Maturing Pension Fund Management
For fiscal year 2024, the Board of Directors has placed special emphasis on developing and managing a maturing pension fund. With the proportion of active members decreasing annually and premium payments ceasing after 2029, the Board views the newly introduced buffer fund as a positive step towards balanced and appropriate management. This strategic focus acknowledges the evolving demographic profile of the fund’s members. (Source: Directors’ Report 2024, page 38)
Enhanced Risk Management Framework Aligned with IORP II
Equinor Pension has adapted its risk management process to align with the legal requirements of IORP II. The fund’s risk management is structured around three lines of responsibility, with the Board setting annual risk limits and targeted risk appetite. This includes periodic measurement of financial risk against the fund’s risk-bearing capacity and tolerance. (Source: Directors’ Report 2024, page 39-40)
Increased Solvency Capital Ratio to 173%
Equinor Pension’s solvency capital ratio improved to 173% at the end of fiscal year 2024, up from 161% in 2023. This ratio, which measures the relationship between total solvency capital requirements and own funds, is continuously monitored and reported to the Board. The fund maintains a strong buffer, with the buffer fund increasing from 21.1% of premium reserves in 2023 to 27.2% in 2024. (Source: Directors’ Report 2024, page 41, Note 14, page 59)
New Chairman Appointed to the Board
In October 2024, Jesper Vogt-Lorentzen was appointed as the new Chairman of the Board of Directors, following the resignation of the previous chairman. (Source: Directors’ Report 2024, page 38)
External Expertise Engaged for Asset Management and Administration
Equinor Pension operates without direct employees, relying on external service providers. Equinor ASA provides services for day-to-day management and administration, while Equinor Asset Management AS delivers asset management services. Storebrand Pensjonstjenester AS handles application processing, payments, member register updates, risk management, and actuarial functions. (Source: Directors’ Report 2024, page 38-39)
Commitment to Ethical and Responsible Investment Practices
Equinor Pension continues to integrate sustainability risks (environmental, social, and governance factors) into its investment analysis and decision-making processes. The fund adheres to ethical exclusion guidelines based on principles similar to those of the Government Pension Fund Global. In 2024, Equinor Pension, through Equinor Asset Management, voted at 144 general meetings, opposing management proposals in approximately 8% of cases when inconsistent with the fund’s voting guidelines. (Source: Directors’ Report 2024, page 39)
Publication of Due Diligence and PAI Reports
In June 2024, Equinor Pension released its second due diligence report under the Transparency Act and a separate statement on the material adverse impacts of investment decisions on sustainability factors (PAI report). Updated versions of both reports are scheduled for publication in the first half of 2025. (Source: Directors’ Report 2024, page 38)
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