Starting to work in Iceland
When you start working in Iceland you have to select a pension fund. You can also choose to add a contributions to personal pension savings. Payments to pension funds are deducted from your wages, at least 4% per month. Your employer also makes a contribution to both your pension fund and your personal pension savings.
All employees from the ages of 16 to 70 are legally bound to pay 4% of their gross wages into a pension fund. The employer pays a contribution of 11.5% of gross wages.
You won't collect a specific balance on an account, as is the case with personal pension savings, but instead you get a guarantee for lifelong pension payments from the time you begin to draw your pension. You will receive payments reflecting your contributions throughout your working life and the return on the fund's investments through those years.
In addition to a lifelong pension you earn the right to a disability pension if your capacity for work is significantly reduced. You also earn the right for your spouse/partner to receive a spouse's pension upon your death and for your children to receive a child's pensions if your capacity for work is significantly reduced or you die.
About Working in Iceland
When you start working in Iceland you have to select a pension fund. You can also choose to add contributions to personal pension savings. Payments to pension funds are deducted from your wages, at least 4% per month. Your employer also makes a contribution to both your pension fund and your supplementary pension savings.