The Icelandic Pension System

Íslenska lífeyriskerfið
Here you will find general information about the Icelandic pension system.

The Icelandic pension system consists of three pillars. 

     

    Social insurance

    The social insurance system is a public pension system, funded with taxes, to which all Icelanders belong.

    Entitlement under the general insurance system is linked to residence in Iceland.

    Pension funds

    Everyone working in Iceland is obliged to contribute to a pension fund.

    The pension funds are based on workers’ cumulative contributions.

    Pension fund members can also apply for disability pensions, spouses’ pensions and children’s pensions.

    Supplementary pension savings

    Supplementary pension savings are voluntary savings of individuals which provide those individuals with benefits.

    The entitlement is inherited according to the rules of the Inheritance Act.

    Other types of pensions included in the social insurance system

    Other types of pensions included in the social insurance system

    Pensions from pension funds 

    Are you entitled to payments from an Icelandic pension fund? 

    Entitlement to payment from pension funds is based on the contributions paid when an individual worked in Iceland.

    Information about your entitlement can be obtained from the pension fund to which you paid when you worked in Iceland.

    In general, pension funds begin paying a pension at the age of 67 years, but some funds begin at age 65.

    Pension payments are generally transferred along with persons who move to other Nordic countries, but it is advisable to contact the pension funds providing the payments.

    Supplementary pension savings

    Supplementary pension savings are your private property and are in addition to mandatory pension savings.

    If you choose to build up supplementary pension savings, you may contribute between 2% and 4% of your salary and your employer then pays a matching contribution.

    You can access your supplementary pension savings if you have a serious accident or illness that reduces your ability to work.

    Payment from supplementary pension savings can begin at the age of 60 or later and is paid in equal instalments until age 67 or longer.

    Supplementary pension savings are inherited upon a pensioner’s death according to the rules of the Inheritance Act.

    Who should I contact if I have questions?

    For more information see the website of the Social Insurance Administration (Tryggingastofnun). You can also get information by telephone at +354 560 4400. 

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