Foreign nationals

  • What effect does Brexit have on the payment of contributions at pension funds in Iceland?

    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.

     (there was an exit agreement between Iceland and Britain that addressed this question) further information 

  • Can I get a refund of paid-in contributions if I leave the fund?

    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.

     

  • 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 is 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 enjoys the same insurance as the social security legislation of his/her home country stipulates.

  • What happens to the contributions paid by foreign nationals when they return to their home 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, 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.

    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.

     Regarding Europe - further information