Pension issues

The Icelandic pension system is built on a solid foundation, based on three main pillars: tax-financed public pension, occupational pension funds with mandatory membership and voluntary pension savings with tax incentives. The strength of the Icelandic pension system is largely connected to the build-up of the pension funds. This means that new resources are set aside as pension rights are procured. BSRB strictly emphasises that this arrangement will not be changed.

BSRB wholly discourages that the specified private pension be implemented into law. This is based on manifold reasoning, with the largest being that this change entails weakening of co-insurance of the pension system, creates inconsistency in the system and reduces the system’s sustainability and can have substantial negative impact on the pension rights of people of lower income, women and those who become disabled early on in their careers. The aim of pension rights equality between the public and private sectors was to co-ordinate pension rights and increase sustainability of the system. The enactment of the specified private pension goes against those aims.

BSRB demands that income indexing for social security and pension payments be significantly reduced. It is important that wage earners who have paid into pension funds throughout their careers see the result of that in their income when they retire due to age or disability.

BSRB demands that the workers of certain professions who are forced into early retirement, e.g. due to pressure in a job, are granted early retirement funded specifically with higher contribution of employers to the pension fund. It is also important to ensure that people are able to continue work despite having reached the age of 70 and that this is reflected in their pension rights.

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