Pension and insurance

Pension payments

Foreign nationals and their obligation to pay a mandatory contribution to Icelandic pension funds

Wage earners from the European Economic Area

Nationals of the member states of the European Economic Area (EEA) who work in Iceland for an Icelandic employer are, as are Icelandic nationals, obligated to pay a minimum 12% mandatory contribution to a pension fund. An exception from this is when a foreign national from the EEA works temporarily in Iceland for a foreign company. Then he/she is exempt from contributing to a pension fund according to Icelandic laws, provided that the person in question has an E-101 certificate from their home country.

Wage earners outside the European Economic Area

Nationals of countries outside the EEA who work in Iceland are always obligated to pay a minimum 12% contribution of the pension contribution base into a pension fund with an operating license from the Minister of Finance.

Can I pay a mandatory contribution to Íslenski lífeyrissjóðurinn pension fund?

Landsbankinn is the custodian of Íslenski lífeyrissjóðurinn. All wage earners and those who are engaged in business operations or are self-employed can pay a mandatory contribution to Íslenski lífeyrissjóðurinn pension fund. This applies unless a collective bargaining agreement that determines the minimum wage of the relevant profession or employment contract provides for compulsory membership to a particular pension fund. If you are in doubt please contact your employer.

Foreign nationals and payment of supplementary pension savings

Foreign nationals earning wages in Iceland are free to pay a supplementary pension contribution to Landsbankinn or Íslenski lífeyrissjóðurinn pension fund. As previously mentioned, Landsbankinn is custodian of the fund.


Foreign nationals - remittance upon emigration from Iceland

Nationals of EEA states:

Pension premiums cannot be remitted to non-Icelandic nationals of EEA states. This restriction applies to both mandatory pension savings and supplementary pension savings.

Countries that belong to the EEA are:

Austria, Belgium, Bulgaria, Croatia, the Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

If the beneficiary was a national of an EEA state during the time premiums were paid, he or she is not entitled to remittance of the amount. Beneficiaries who

hold a double citizenship, one as a national of an EEA state, are not entitled to remittance of paid premiums.

US citizens:

Citizens of the United States of America are not entitled to remittance of premiums paid towards mandatory mutual or private pensions. US citizens are entitled to remittance of premiums paid to unrestricted private pension savings paid as part of mandatory contributions and to remittance of premiums paid towards supplementary pension savings.

Nationals of countries other than EEA states and the US:

Premiums paid to beneficiaries who are citizens of countries other than EEA states and the US towards mandatory pension programmes and to supplementary pension savings may be remitted.

Withdrawal is permitted once two years have elapsed since the initial premium payment.

Beneficiaries are required to submit a disbursement request and the following documents:

If the beneficiary emigrates from Iceland before two years have elapsed since the initial premium payment, he or she can submit the application along with accompanying documents in advance. The application will be retained until remittance is permitted.

Payments to EEA state nationals and payments of mandatory pension savings to US citizens:

Once payment can begin under the terms of the insurance policy, EEA state and US nationals can apply to their respective social security agency for intermediacy for pension payments from Iceland. Such social security agencies apply to the Icelandic State Social Security Institute.

 

Foreign nationals - remittance upon emigration from Iceland

Obywatele zagraniczni – zwrot wysokości składek w związku z przeniesieniem adresu zamieszkania z Islandii