Terms of Contract

for Private Pension Savings

1. Obligations of Rightholder
The rightholder undertakes to pay to the depositary a monthly deposit from the total amount of paid wages in accordance with Article 3 of Act No. 129/1997, and the payment shall be the private property of the rightholder and specified in their separate account.

The rightholder shall entrust the employer with retaining the agreed deposit from their wages and to pay the amount to the depositary. Payments must begin no later than two months after the signing of this contract.

The payment period of each deposit shall not exceed one month, and the due date of the payment shall be the 10th of the following month. The final due date shall be the last day of the month in which the premium is due. The rightholder must inform the depositary in the event they resign from the relevant employer.

2. Obligations of the Depositary
The depositary undertakes to invest the deposits of the rightholder in accordance with Article 36 of Act No. 129/1997. The parties to the contract may agree to invest the deposit in special securities portfolios/divisions, as they fulfill the conditions of the said legal provision. Deposits to private pensions carry interest from the date of deposit. The depositary is not responsible for deposits that the employer has deducted from the wages of the rightholder but has not paid to the depositary. The depositary must send a statement of deposits received from the employer and information on the status of the private pension savings account to the rightholder at least twice a year. The depositary must ensure that the part of his operations that relate to the safekeeping and investment of the rightholder’s deposits is financially separate and is not subsidised by other activities.

3. Contribution to Private Pension
Contributions to Gildi Private Pension Fund do not grant points or a predetermined pension. Instead, payments from the Fund shall be in accordance with each member’s credit balance.

4. Payment of Private Pension Savings
The rightholder can begin withdrawing their private pension savings at the age of 60, but not, however, sooner than 2 years from the first deposit.

In the event the rightholder suffers 100% loss of capacity, private pension savings and interest may be paid out with equal annual payments over a period of no less than 7 years. The annual payment decreases and the withdrawal period lengthens in proportion to the decrease in the disability percentage.

If the credit balance of the rightholder is less than ISK 500,000, the payments may be distributed over a period shorter than 7 years. This reference amount shall be adjusted based on changes in the consumer price index from the base index of 173.5 points.

Should a rightholder die before the credit is fully paid out, it shall become the property of their heirs and be divided among them in accordance with the rules of the Inheritance Act. Should a rightholder have neither a spouse nor children, the credit shall accrue to their estate, in which case the limitation in the second sentence of Paragraph 2, Article 8 of Act No. 129/1997 shall not apply.

5. Provisions for Termination

This contract may be terminated with two month’s notice. The contract shall expire if the rightholder retires, which is a prerequisite for their payments to the Gildi Private Pension Fund, unless the rightholder requests to continue to make payments to the private pension fund. The termination of the contract does not provide any entitlement to payment of credit or rights. A contract may be made on the transfer of credit or rights after termination. The transfer is limited to those who can offer supplementary insurance contracts, cf. Paragraph 3, Article 8 of Act No. 129/1997.

6. Assignation of Rights
Rightholders may not assign, mortgage or otherwise dispose of their credit or rights pursuant to this contract. However, agreements are permitted according to items 1–3 of Paragraph 3, Article 14 of Act No. 129/1997 on the division of rights between the rightholder and their spouse, as well as transferring the credit balance between depositaries, cf. Article 5 of this contract.

7. About the Contract
This contract is prepared in two identical copies.

This contract shall be governed in other respects by the provisions of Act No. 129/1997 and the Articles of Association of Gildi Pension Fund as applicable.

The rightholder has familiarised themselves with the provisions of said Act and Articles of Association.

  1. Signature
    To confirm the contract, the rightholder has to sign it.