Q&A

Welcome to the website of The Icelandic Pension Funds Association.

Below is an english translation of frequently asked questions on pension savings and above you find the main subjects.

Additional pension savings

  • Can I use the additional pension savings if my capacity to work is impaired or if I become unemployed?

    In the event serious accidents or a long-term illness cause a loss of the capacity to work, this is permitted. It is not permitted to withdraw the additional pension savings if you become unemployed.

  • Do I need to negotiate for the withdrawal from my personal pension fund or will it be paid out automatically when I reach the stipulated age?

    Withdrawals from an additional pension savings fund have to be negotiated. Withdrawals may start, whether in one lump sum or in separate payments, when you reach 60 years of age.

  • Do the additional pension savings affect the old-age pension paid by social security?

    Payments from additional pension savings will not influence the old-age pension and income maintenance from social security.

  • Is it advisable to use one’s right regarding additional pension savings?

    Yes, certainly, as this contributes to a better financial standing at retirement, and makes it easier for people to stop working before the age of seventy. Additionally, this can be beneficial in the event of serious accidents or illness which impairs the capacity to work. Additional pension savings are the best type of savings available. Wage agreements contain a provision on wage payers contributing 2% of their employees’ wages as a complementary contribution to their additional pension savings, providing the wage earner’s contribution amounts to at least 2%.

  • Is there a difference where it is best to keep my additional pension savings?

    Choose your custodian carefully. Generally, such custodians offer various investment plans involving different investment policies. It is important that you acquaint yourself with the various choices before you decide where to invest your additional pension savings. Furthermore, it is imperative to obtain all the information on costs (initial cost, operating expenses, asset management cost). In the event you become dissatisfied with the services and investment results, you can move to another custodian.

  • What are the rules concerning additional pension savings?

    Wage earners and the self-employed are permitted to pay up to 4% of their total wages as extra contributions to additional pension savings. A provisional reduction of the authorization to deduct contributions to additional pension savings will apply until 1st July 2014. Most wage agreements contain a provision for wage payers to pay 2% of the wages of their employees as a complementary contribution to their additional pension savings, providing the wage earner’s contribution amounts to at least 2%.

  • When will I be able to withdraw the additional pension savings?

    You may start to withdraw the additional pension savings at the age of 60 years, when you will be able to withdraw the entire sum. Such withdrawals may be spread at the request of the fund member. It is permitted to withdraw the entire amount of additional pension savings at the death of the fund member. Upon disability the payments are spread over a longer period. However, a lump sum payment is permitted if the amount is low.

  • Where can I make an agreement on such savings?

    Pension funds, commercial banks, savings banks, securities companies and life insurance companies are able to offer additional pension savings. It is not sufficient to request that the wage payer start making payments toward additional pension savings. It is necessary to enter an agreement with the custodian of the pension savings. In the event a wage earner starts working for a new employer it is important to contact the custodian of the pension savings and enter a new agreement with the new wage payer.

  • Will additional pension savings be inherited?

    The additional pension savings are owned by the fund member. At his/her death, the deposit, in addition to indexation and interest, will be divided under specific rules between his/her legal heirs.

  • Will pension payments suffice to ensure my unchanged income upon retirement? Do I need to save more for my retirement years?

    Pension payments usually do not suffice to ensure unchanged income when you retire. Therefore, it is desirable for everybody to make additional savings, and additional pension savings are the best form of savings for the purpose of increasing your pension.

Disability pension

  • Am I also entitled to a disability pension from the social security system?

    The social security system will also pay a disability pension. See further the website of the State Social Security Institute,www.tr.is. The disability pension paid by the social security system may affect the disability pension paid by the pension funds. When calculating whether a fund member has suffered an income reduction due to impaired working capacity, consideration is given to earned income from work, payments by the social security system and pension funds and contractual payments.

  • Am I entitled to a disability pension from my pension fund if I need to be absent from work due to the illness of a family member?

    No

  • Am I entitled to payments in the event I suffer an accident or become seriously ill?

    If you have suffered an accident or suffered an illness which impairs your working capacity, or causes a loss of income, you may be entitled to a pension, the conditions being that your occupation has granted you access to the pension fund in question and you have verifiably suffered a reduction in income. This decision is decided by a loss of income of at least 50% (40% at some funds) and you have been paying into a pension fund for at least two years. When three years have passed it is checked whether the fund member has become able-bodied for all general work even though he/she is not able to do the same work as he/she did prior to the accident or illness.

  • How long will a disability pension be paid by pension funds?

    Disability pension is paid until the fund member has reached pensionable age, which then will be altered to old age pension. However, a disability pension will be cancelled in the event the fund member regains full working capacity or does not suffer any reduction of income due to his/her impaired working capacity.

  • How much pension will I be entitled to in the event I cannot work due to illness?

    The amount of the disability pension is decided by the rights which the fund member has accumulated at the fund. Fund members may be entitled to additional rights based on payments which they would have accumulated if they had paid their contributions up to their pensionable age. Any rights which a fund member is entitled to, in addition to his/her accumulated rights, are called extrapolated rights. So as to be able to acquire such rights, the fund member needs to have paid into the pension fund for at least four consecutive years, thereof at least for six months during the past twelve-month period prior to his/her loss of ability. The right to extrapolation is dependent on the loss of the capacity for work not being traced to the abuse of alcohol, medical drugs or narcotics. If this is the case, the amount of the disability pension shall be limited to the accumulated rights.

  • Will our children be entitled to a pension in the event we become seriously ill or suffer an accident?

    Yes. In general, the amount of the child allowance is not dependent on the fund member’s wages, rather being a fixed amount which will be changed in keeping with the rise in the Consumer Price Index (CPI). In the event the fund member is being paid a disability pension, this will, in addition to any child allowance, never exceed the loss of income which the fund member has verifiably suffered due to his/her disability.

  • Will the pension fund offer me assistance if I become unemployed?

    No. Pension funds do not pay a pension due to unemployment.

  • Will the pension fund pay me a pension if I have not suffered any reduction of income due to my invalidity?

    No, the condition for the payment of a disability pension is that the pension member has suffered a reduction in income due to an accident or a long-term illness. In the calculation of the reduction in income, consideration is given to earned income from work, payments by the social security system and pension funds and contractual payments.

Old-age pension

  • Am I required to apply for a pension?

    Yes, it is necessary to apply for a pension from the pension funds. In the event a fund member has the right to a pension, it is sufficient to apply for a pension to the pension fund into which a contribution was paid last or to the fund in which the fund member has the most rights. The fund will then forward the application to the other funds.

  • Does financial income influence the amount of the pension payments from the pension funds?

    No. The rights which you have acquired through payments to pension funds will not be reduced even though you receive other income at your retirement, e.g. earned income, financial income or rental income. In deciding payments from the social security system, all incomes come into play, also payments from pension funds. Pension payments from pension funds may be reduced by payments from the State Social Security Institute.

  • Does the income of the spouse influence the amount of pension from pension funds?

    No, the only reference is provided by the contributions of fund members to their pension fund.

  • Is it possible to divide pension rights between a married couple and cohabitants?

    Yes, this is possible under specific regulations. The division of pension rights only applies to those who are currently or have been in a legal or common-law marriage. Such division of pension rights shall involve a mutual division which is commensurate, i.e. each party to a legal or common-law marriage shall grant the other party rights equal to their own. Therefore, both parties need to divide their pension rights. It is permitted to assign to the other party up to one half of the pension rights.

  • What is the difference between a pension from the social security system and from the pension funds?

    “Your rights in pension funds are decided by the contributions which you have paid into them during your working life. The social security system ensures a minimum pension for everybody, also when little or nothing has been paid into a pension fund. All working individuals are obligated to be members of a pension fund and pay into it a specific percentage of their wages. Wage payers make a complementary contribution for each worker to these pension funds. In case an individual has paid very little or nothing into a pension fund, the social security system accepts the responsibility through higher payments. Further information on social security is to be found on the website of the State Social Security Institute, www.tr.is 

  • When can I begin to receive a pension from a pension fund?

    While this varies somewhat between funds, the general rule is that it is possible to begin receiving a pension at the age of 62 to 70. The pension will then be paid monthly in equal amounts for the rest of your life. While the reference age may vary between the pension funds, most of them use 67 years of age as a reference. It is possible to bring forward or postpone the payment of a pension, most often as of 62 years of age, while several funds provide no upper limits on the age limit how long the payment of the pension can be postponed. The monthly payment will be reduced or increased depending on how much the payment of a pension is brought forward or postponed. In the event the fund member brings forward the payment of the pension, he/she will receive a lower payment per month during a longer time period, while if he/she postpones the payment of a pension, he/she will receive higher payments monthly during a shorter period. Thus, it is decided by how long a fund member will live whether it is an advantage or a disadvantage to start receiving pension payments earlier or later.

Payments into a pension fund

  • Am I able to choose which pension fund I wish to pay into?

    Membership of a pension fund shall depend on the wage agreement determining the minimum terms for the occupation in question or, if applicable, a special law. In the event your wage agreement does not cover the occupation in question, or if your contract of employment is not based on a wage agreement, you will be able to choose your own pension fund depending on the regulations of the individual funds. The regulations of some pension funds do not allow everybody to be a member. This, for example, is the case for the Pension Fund for State Employees (LSR).

  • Am I able to demand the refund of paid-in contributions upon the termination of my membership to the fund?

    No, it is not permitted to refund contributions to Icelandic citizens, whether in the case of coinsurance funds or additional pension savings. When foreign nationals leave Iceland, they shall be entitled to a refund of their contributions, providing they are nationals of countries outside the European Economic Area (EEA).

  • Am I obligated to pay into a pension fund?

    Yes, according to law all wage earners, as well as those who are self-employed, are obligated to guarantee their pension rights by being a member of a pension fund. Such obligatory membership shall apply from the age of sixteen to the age of seventy.

  • Are foreign nationals obliged to pay into pension funds?

    Under the Pension Fund Act foreign nationals being paid wages in Iceland shall pay into a pension fund under the same regulations as Icelandic nationals. An exception to this rule will be made when a foreign national within the European Economic Area (EEA) is employed by a foreign company for a limited time and is in possession of an E 101 Certificate issued by his/her home country. Then, he/she will enjoy equal insurance as stipulated by the social security legislation of his/her home country.

  • How much am I obligated to pay into a pension fund?

    The minimum contribution to a pension fund shall amount to total wages from the age of 16 to the age of seventy. For wage earners on the general labour market, the division of the contribution to be paid into pension funds shall be decided by wage agreements, this division, in general, being that the wage earner pays 4% of his/her total wages, while the complementary contribution of the wage payer amounts to 8%. For civil servants, bank employees and specific professions the complementary contribution is higher.

  • I cannot recall which pension funds I have paid into during my life. Is there any chance that any payments would be lost or depreciated?

    No rights will be forfeited even though the statements have been lost. You can contact any of the pension funds to which you have belonged and obtain a password to the fund members’ website where you will find a statement showing all the pension funds you have paid into.

    Furthermore, you can observe your entire rights in coinsurance funds to which you have made payments by entering the Pension Portal. Pension fund members are able to get access to the Pension Portal on the websites of the pension funds, using the same password as for the fund members’ website in question.

  • What do I gain by paying into a pension fund?

    An old-age pension to the end of your life. Disability pension and child allowance if the fund member has verifiably lost his/her wages due to an illness or an accident. A pension to the surviving spouse and surviving children at the death of the fund member will be paid to the spouse and his/her children at the death of the fund member. There is the possibility of loans on favourable terms.

  • What happens to the contributions paid by foreign nationals when they return to their home country?

    It is not permitted to refund contributions to foreign nationals within the European Economic Area (EEA). This is according to a mutual agreement between the member states of the treaty on the application of social security regulations applying to those who move between the member countries.

    It is permitted to make refunds of contributions to foreign nationals of countries outside the EEA when they move from Iceland. Both the contribution of the fund member and the wage payer will be refunded without interest but with indexation adjustment. In the event the fund member has acquired the right to the extrapolated calculation of disability (usually after 3 years), the refund ratio may be reduced.

  • When am I supposed to have paid into a pension fund as a self-employed individual?

    Contributions are to be paid monthly, the due date being the 10th day of the month following the month for which wages have been paid. The final due date shall be the last day of the month of payment. In the event contributions are paid after the due date, default interest shall be calculated as of the due date.

  • Who supervises the payment of contributions to pension funds?

    The Directorate of Internal Revenue supervises the payment of pension contributions by comparing information provided by the pension funds to the paid-in contributions with information provided by the tax returns of wage earners and the self-employed. Pension funds submit to each fund member a statement of the contributions received on his/her behalf. It shall be permitted to deliver such statements in electronic form if so requested by the fund member. Fund members shall supervise that the stipulated contributions are being paid regarding their wages. To enable contributions of a wage earner to be covered by the Wage Guarantee Fund, wage earners will be obligated to ascertain the wage payer’s delivery to the pension fund within 60 days from the date of the statement. In the event any contributions are missing from the statement, it is important that the wage earner report this to the Wage Guarantee Fund by submitting their pay slips within 60 days. Pension rights are exclusively based on contributions having been paid.

Pension funds

  • Am I able to choose a specific pension fund?

    Everybody is obligated to be a member of the pension fund which is referred to in their wage agreement or contract of employment. In case a new wage agreement applies to the occupation in question, or the contractual terms of employment are not based on a specific wage agreement, the individual shall be able to choose his/her pension fund depending on the regulations of such funds.

  • Is it possible to obtain loans from pension funds?

    Most pension funds grant loans to their fund members against a mortgage subject to specific conditions being met. The credit terms of loans to fund members are, generally, very competitive, making fund member loans a good option for those who need long-term loans, e.g. for buying real property.

  • What do I gain by paying into a pension fund?

    By paying into a pension fund, fund members earn the following rights.

    • Old age pension to the end of their lives.
    • Disability pension upon the loss of employment due to accidents or illness.
    • Pension to the surviving spouse upon the death of their spouse, generally a temporary pension (3 to 5 years), while some pension funds will pay a pension to surviving spouses to the end of their lives.
    • Payments for surviving children upon the disability or death of the fund member.

    The chief objective of pension funds is to pay old-age pensions to the end of their fund members’ lives. As the payment of old age pensions generally constitutes the biggest portion of the fund members’ income during their retirement years, pension fund rights are very important.

  • Why am I obliged to pay into a pension fund?

    Iceland operates an obligatory coinsurance system, according to which all wage earners and those who are self-employed, from 16 to 70 years of age, must pay into a pension fund a contribution amounting to 4% of their total wages. In general, your wage payer is to make a contribution amounting to 8% of your total wages, in some instances the wage payer’s contribution amounts to a higher proportion of the wages. Fund members are all those who are paying, or have paid, a contribution into the pension fund in question. The function of pension funds is to ensure for their fund members old-age pension for the rest of their lives, in addition to protecting them and their families against the loss of wages due to disability (disability pension and payments to surviving children) and death (pension to the surviving spouse and payments surviving children).

Rights

  • Am I covered by some minimum rights of the pension fund?

    Pension fund rights depend on the contributions paid into the fund. Under law, pension funds are obligated to ensure a minimum pension amounting to 56% of the wages of which contribution is paid into a pension fund as a monthly pension for the rest of your life, providing contributions have been paid for 40 years. While the same minimum shall apply for a disability pension, the pension to the surviving spouse shall amount to at least 50% of the minimum insurance cover. Payments to surviving children are usually a fixed amount, not depending on the fund member’s wages. Many pension funds grant more rights than the minimum insurance cover stipulated by law, either as coinsurance or a private fund.

  • Are pension payments index-linked

    Yes, pension payments are index-linked. Most pension funds alter the amount of the pension according to changes in the Consumer Price Index (CPI). Some pension funds calculate pensions as a proportion of wages, thus being raised consistent with pay rises.

  • Do regulations and rights differ from one pension fund to the other?

    Rights tend to vary between pension funds. The Pension Fund Act stipulates the minimum insurance cover of pension funds. Most pension funds operate websites containing information on the rights they are providing. The most detailed information on rights is contained in the articles of association of the pension fund in question.

  • Does the membership of pension funds grant any other rights than to a pension?

    Most pension funds grant to their members loans at favourable terms against a mortgage in real property. Credit regulations and terms tend to be different between the funds. In general, such loans are linked to the Consumer Price Index (CPI).

  • Having paid into more than one pension fund, am I able to obtain information about my right from one location?

    Yes, you can contact any of the pension funds into which you have paid and obtain a password to the fund members’ website. There you will find a statement showing all the pension funds into which you have paid.

    Furthermore, you are able to view all your rights by entering the Pension Portal. Pension members can gain access to the Pension Portal on the websites of the pension funds using the same password as for the website of the pension fund in question.

    When you start to receive a pension, it is sufficient to apply to one fund due to a special agreement between the pension funds. In general, applications are to be made to the fund into which a contribution was paid last, and then the application will be forwarded to the other funds.

  • Is it possible I might lose some rights by moving from one country to the other?

    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 acquired the right to the extrapolated calculation upon a move from Iceland, it will take six months to reinstate such rights from the start of renewed contributions.

  • Is it possible to move the rights between pension funds when I start to receive pension payments?

    Pension rights are not transferable between the funds.
    Special regulations apply to communications between pension funds. Thus, just before you start to receive a pension it is sufficient to apply to the fund into which a contribution was paid last, and then it will forward the application to other funds into which contributions have been paid.

Social security affairs

  • Can I decide not to buy life insurance if I am paying into a pension fund?

    New fund members with children to support and with significant financial obligations should seriously consider buying life insurance so as to protect their family in the event of their death. A life insurance policy can be crucial upon death so as to protect the family against the loss of income at the death of the fund member. At death, a pension for the surviving spouse will be paid by the pension fund until the youngest child has reached the age of 18 years (some pension funds make payments for surviving children for a longer period), but if the children have grown up, the pension for the surviving spouse usually is provisional and will be paid for three to five years (however, by some pension funds for a longer period). During the first three years of paying into a pension fund the rights tend to be limited and, therefore, the Icelandic Pension Funds Association (IPFA) urges new fund members to seriously consider taking out a life insurance policy during their first years in the labour market. Anyway, while it can be argued that life insurance is advisable at any time during your working life, the need is especially great during the first three years of paying into a pension fund.

  • Do I need to buy insurance to protect myself against the loss of income due to accidents or illness if I am paying into a pension fund?

    In general, it takes new fund members three years to acquire the right to a full disability pension. This means that young people who are starting their work in the labour market have no disability insurance during their first years. This is bad, taking into account that these are the years when people are starting a family and setting up their home. Therefore, it would be sensible for new fund members to buy special disability insurance.

Supervision and maintenance

  • Do I have to do anything specific when I begin to pay into a pension fund?

    You should begin by acquainting yourself with how rights are accumulated in your pension fund. How will your pension rights accumulate and what will they be upon retirement? What disability payment will you receive in the event you become disabled due to an accident or an illness? What pension will be paid to your close relatives upon your death? Contact your pension fund and check your position. Furthermore, most pension funds also operate a website providing information on the rights they are offering.

  • Do I need to attend meetings and seminars of my pension fund? Shouldn’t I make better use of my time?

    You should attend annual general meetings and pay attention to the operations and performance of the fund. These are important rights which require supervision as do other assets. Some pension funds even invite their members to attend seminars on pension matters. It can prove to be very useful to attend such seminars to learn about pension matters and thus be better prepared to assess whether your rights are adequate.

  • Do I need to supervise whether my wage payer is paying its contributions to my pension fund?

    Your pension fund will submit to you a statement of contributions twice a year. You should compare this to your pay slips. If any payments are missing you should contact your wage payer and request an explanation or contact your pension fund and ask the fund to collect the unpaid contributions. Pension rights are based on paid contributions. Most pension funds also offer their members access to protected websites containing information on contributions and rights. Request access to such information as you can then look up any contributions and rights at your convenience.

  • How can I check on how the rights are accumulating in my pension fund?

    Check the statements on how your pension rights are generated and accumulated. Most statements also show what pension payments you will receive upon retirement providing you continue to make contributions. If it seems to you that the expected pension payments will not be sufficient, you need to increase your savings to achieve your objective. Then, it is important for you to begin your savings as soon as possible. Most pension funds operate a fund members’ website showing your paid contributions and rights. Furthermore, you can observe your entire rights in the coinsurance fund by accessing the Pension Portal. Pension fund members are able to gain access to the Pension Portal through the websites of the pension funds by using the same password as for the fund members’ website in question.

Taxation

  • What tax regulations apply to additional pension savings?

    The same tax regulations apply to contributions for additional pension savings, i.e. while pensions are taxed as any other type of work income, pensioners can use the personal allowance to reduce their taxes. The contributions are paid without tax into additional pension savings.

  • What tax regulations apply to contributions to a pension fund?

    A fund member can at most deduct 8% of his/her wages from taxable income, 4% for a contribution into a coinsurance fund and 4% for additional pension savings. A provisional reduction of wage payers’ deductible contribution to additional pension savings to 2% will be in effect until 1st July 2014. Contributions paid within these limitations to a pension fund are not taxed as they are deducted from taxable income before income tax is calculated. Thus, such income has not been taxed upon the acceptance of a pension payment. Also, a wage payer is entitled to deduct its contribution from the tax.

  • Why do I have to pay taxes on my pension payments?

    While a pension is taxed as any other work income, pensioners can use the personal allowance to reduce their taxes. As pension contributions are being paid without being taxed into a pension fund, this avoids double taxation of a pension. Rights at pension funds are exempt from capital gains tax on interest income.

The family

  • Are our children entitled to a pension in the event one of us dies?

    The fund member’s children, and adopted children, are entitled to payments for surviving children until they reach 18 years of age, and at other pension funds for longer periods. A pension for surviving children is paid if the fund member has kept paying for at least 24 months during the past 36 months, or for 6 months during the past 12 months, prior to the death of the fund member, has been receiving old age or disability pension at death or acquired the right to extrapolated calculation. Stepchildren and foster children will be entitled if they have verifiably been supported by the fund member. In general, the amount of the payments to the surviving children is not dependent on the fund member’s wages, rather being a fixed amount which will change in keeping with the rise in the Consumer Price Index (CPI). The amount of the pension for the surviving children will be higher due to the fund member’s death than if he/she loses the capacity to work.

  • Does it matter whether my spouse is still working or has retired or is receiving a disability pension at death?

    No. The amount of the pension for the surviving spouse depends on the rights which the fund member has acquired before death, including other rights he/she has accumulated at the fund if he/she has been making contributions up to the age of 65 or 67 (extrapolated calculation). So as to accumulate the right to extrapolated calculation, the fund member will have to have kept making contributions to the pension fund for at least 24 months in the past 36 months, or 6 months in the past 12 months, before death.

  • Does the amount depend on the size of the family?

    In the event there are children living in the home, the surviving spouse will be paid full pension for the surviving spouse until the youngest child has reached 18 years of age (for a longer period for some funds). Also, a child allowance will be paid if the fund member has been making contributions for at least 24 months in the past 36 months, or 6 months in the past 12 months, has been entitled to an old-age pension or a disability pension at the time of death, or has acquired the right to the extrapolated calculation.

  • How long am I entitled to the pension for the surviving spouse?

    Full pension for the living spouse shall be paid for at least two years. Any extension depends on the conditions in the home and the regulations of the pension fund in question. Some pension funds pay a full or reduced pension to the surviving spouse for the rest of his/her life. However, this will be cancelled in the event the spouse remarries or becomes a cohabitant anew.

  • I am a homeworker and have never paid into a pension fund. Am I entitled to a portion of my spouse’s pension rights?

    Your spouse is authorized to assign to you up to one half of his/her pension rights. Upon the death of the fund member, the surviving spouse will receive the pension for the surviving spouse, whether the rights have been divided or not. The full pension for the surviving spouse will be paid for at least two years. In the event the surviving spouse has children under 18 years of age to support, the pension for the surviving spouse shall remain full until the youngest child has reached 18 years of age. Some pension funds provide the pension for the surviving spouse for a longer period. In the event the surviving spouse is an invalid at the death of the fund member, and is under the age of 67 years, the pension for the surviving spouse will be paid for the duration of the disability. The pension for the surviving spouse will be cancelled if the spouse enters a new marriage or enters cohabitation.

  • In the event of the death of my spouse, will I receive pension from his/her pension fund?

    Yes. A pension to the surviving spouse is paid to the surviving spouse upon the death of the fund member. A full pension for the surviving spouse will be paid for at least two years. In the event the surviving spouse has children under 18 years of age, a full pension for the surviving spouse will be paid until the youngest child has reached 18 years of age (longer for some funds). In the event the surviving spouse is an invalid at the death of the fund member, and is under 67 years of age, the full pension for the surviving spouse will be paid during the period of such disability. Some pension funds pay a full pension or a reduced pension for the surviving spouse, even for the rest of his/her life. However, it will be cancelled if the spouse enters a new marriage or becomes a cohabitant. Please note that the surviving spouse is entitled to use the deceased’s tax card for 9 months as of the month of death.

  • My spouse enjoys a higher income than I do. Are we allowed to combine our pension rights?

    “Yes, it is permitted to divide the pension rights with one’s spouse. The division must be mutual, meaning that a married couple or cohabitants shall transfer to the other party an equal portion of his/her rights. The authorization may involve up to one half of the pension rights. However, the division of pension rights between a married couple shall only cover any rights which have been accumulated during the period of marriage or cohabitation. The division of pension rights can be divided in various ways. – Firstly, it is permitted to divide the pension rights already in place. – Secondly, accumulated pension rights can be divided, providing this is done at the latest before the fund member reaches 65 years of age, and thirdly, this may involve the division of future rights, i.e. any pension rights which will be accumulated after the division has been agreed. It is important to seek the assistance of an adviser at the pension fund prior to the division of the pension so as to ensure that the advantage of the division is clear beforehand.”