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All workers must pay into a pension fund, which is paid out at retirement age.
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The general rule is that the premium paid into a pension fund or reversionary annuity is 10% of the total salary package. The employee pays 4% of that amount, and the employer pays the additional 6%.
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Some pension funds reimburse none-EEA/EFTA citizens a part of what they have paid if they migrate from Iceland.
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The aim of these savings options, and pension funds are to ensure compensation to retired persons, those disabled during employment, and life insurance survivor's benefits for children and spouses.
- Pension funds pay retirement pension in proportion to fees paid during ones working live.
