Pension

The Fund pays two types of pension:

  • Savings pension
    Old age pension is a savings pension, as the fund member accrues pension rights until he/she starts receiving pension.
  • Risk pension
    Disability, spouse's and children's pensions are in the risk pension category.

The amount of pension depends on contribution payments to the fund. When calculating disability and spouse's pension, the remaining years to the age of 65 are often taken into account.

Pension payments are inflation-protected and are adjusted monthly according to the Icelandic Consumer Price Index. Pension is paid monthly on the last weekday of each month into the pensioner's Icelandic bank account.

Pension payments are subject to income tax in the same way as earned income.

All individual taxpayers are entitled to a tax card stating the personal tax allowance, which reduces their income tax. Therefore, if the pensioner has an unused tax card, it is important to send it to the fund. Married or cohabiting couples can use 100% of the other spouse's unused tax card.