Reliable Pension Insurance

Payments into a pension fund create the right to a retirement pension upon retirement and a disability pension if working capacity is reduced due to illness or accident. Spouses and children may be entitled to payments upon the death of a fund member.

Retirement Pension

You can start receiving a retirement pension between the ages of 60 and 80. The pension is independent of other income and is paid to the end of life in accordance with the rights earned by the individual in question.

Disability Pension

In the event of impaired ability to work and loss of income due to disability, fund members may be entitled to rehabilitation or disability pensions.

Spouse’s Pension

If a fund member dies, the surviving spouse is entitled to a pension for at least five years. The entitlement is based on marriage to a fund member or cohabitation for at least two years before the demise.

Child Pension

If a fund member passes away or becomes unable to work, his/her children, under the age of 18, are entitled to child pension.
Division of Retirement Pension
Reference Premium
Accumulation of Rights
Half Pension
Social Security Pension

Taxation of Pension Payments

Notification must be sent as to which bracket income tax payments are to be in if the total income of the pension recipient, from the fund and others if appropriate, totals more than ISK 446,136 per month. The fund is responsible for paying the withholding tax, but each person has to let us know what percentage of the tax card they want to use with the fund.

In 2024, the personal tax allowance is ISK 64,926 per month, and the tax-free limit for pension recipients is ISK 206.245 per month.

Pensioners can use up to 100% of their spouse’s unused tax card for tax reduction. On the demise of a spouse, pension recipients can use the tax card of the deceased spouse for 9 months as of the month of passing.

RSK: Detailed information on taxes and their payment.

On the first ISK 446,136 per month
31.48%
On an amount from ISK 446,137 to 1,252,501/month
37.98%
On an amount over ISK 1.252.501/month
46.28%