Moving to another country

According to Article 19, Paragraph 4 of Act no. 129/1997, it is permissible to reimburse foreign nationals’ pension fund contributions upon their moving away from Iceland, provided that such reimbursement is not prohibited under international agreements to which Iceland is a party.

Iceland has already concluded international agreements with over thirty countries, referred to hereinafter as contracting states. Contracting states are the United States, Canada, European Economic Area (EEA) member countries, and Switzerland; i.e., all EFTA and EU member states.

• EFTA states are Iceland, Norway, Liechtenstein, and Switzerland, by virtue of the Vaduz Convention.
• EU member states are Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Greece, the Netherlands, Ireland, Italy, Croatia, Cyprus (the Greek part), Latvia, Lithuania, Luxembourg, Malta, Portugal, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, the Czech Republic, Hungary, and Germany.

A person who is a citizen of a contracting state may not apply for reimbursement of pension contributions upon moving away from Iceland.

Even if a person has multiple citizenship, it is not permissible to reimburse contributions if the person is a citizen of one or more contracting states. In cases of such multiple nationality, all of the countries concerned must be non-contracting states in order for reimbursement to be permissible.

Further information tr.is

Special rules apply to British nationals who were citizens of a contracting state until 1 January 2021; i.e., while the UK was still a member of the EU. In the case of British nationals who moved to Iceland and began working in Iceland on or after 1 January 2021, it is permissible to reimburse pension contributions for January 2021 and subsequent periods.

The act that applied before Brexit to the payment of contributions remains in effect through 1 January 2021.

Thus, the rights acquired at Icelandic pension funds before Brexit are still preserved and paid out under the act in force through January 2021.

People living in Iceland who may have pension rights in another country apply through the State Social Insurance Administration www.tr.is. The State Social Insurance Administration will forward the application to the relevant agency abroad and see to communications with the agency.

This applies to the countries under the EEA Agreement www.tr.is.

Iceland has also signed international agreements with other states, and the State Social Insurance Administration also sees to communications with comparable related agencies in other countries www.tr.is.

This works the same way in the EEA countries and the states with which Iceland has signed international agreements. Thus, if someone lives in another country and has possible rights in Iceland, he or she contacts the State Social Insurance Administration’s related agency in the relevant country. For example – if someone lives in Sweden, he or she contacts Pensionsmyndigheten to apply, for instance, for a pension in Iceland. Pensionsmyndigheten is a comparable agency, and it sends the application to the State Social Insurance Administration, which will then forward it to pension funds in Iceland.

Moving within Europe - Which country will pay my old-age pension?

Moving within Europe information 

Information on an agreement between Iceland and the United States 

Earned rights are preserved for the fund or funds you have paid into. When the time comes for pension payments, you must apply for them.

The right to the so-called extrapolated calculation of a disability pension is cancelled one year after such a move, in addition to a child allowance. In the event a fund member has obtained the right to extrapolated calculation upon moving away from Iceland, it will take six months to reinstate such rights after restarting contributions.

This depends on the laws and regulations in the relevant countries. It is important to acquaint yourself well with the rules of the country where you live, and whether it may be necessary to obtain additional insurance.

You keep earned rights, but you lose the right to extrapolated calculation of a disability pension. It may therefore be advisable to consider additional insurance.

This is possible, but because of tax rules, it generally does not generally pay to make contributions to a pension fund in Iceland while living in another country. In Iceland, you can deduct contributions from taxes, and you then pay income tax on withdrawals from a pension fund. There is therefore a certain risk of double taxation.