Division of pension rights between spouses
Fund member can divide pension rights that accrue during cohabitation. Both already acquired rights and future rights, i.e. the rights that fund members will acquire later, can be divided. This division does not include disability or spouse pension rights.
The division must be mutual, meaning that each partner in a cohabitation must grant the other the same proportion of their rights. You can transfer up to 50% of your rights to your spouse and receive the same percentage of your spouse's rights.
If applying for the division of rights that have already been accrued, it is necessary to apply for it before retirement begins and before the older partner reaches the age of 65. Both parties must submit a medical certificate from a doctor confirming that they do not have reduced life expectancy.
Upon the death of one partner, the division remains unchanged, i.e. the surviving spouse continues to have the agreed part of the deceased spouse's rights, but does not get back the part of the rights that was transferred.
Cancellation of agreement
The division of rights is binding and cannot be revoked unless the consent of all pension funds is obtained. The parties can jointly request the cancellation of the agreement on the division of future rights.
Example of division of retirement rights in Division A
- Magnús has ISK 500,000 for monthly retirement rights, while Guðrún has ISK 200,000.
- They divide their rights by 50%.
- Roughly speaking, each individual's rights will be ISK 350,000 per month after the division.
- If Magnús passes away before Guðrún, her pension payments will continue to be ISK 350,000 A spouse pension is added, which is based on ISK 500,000 (ISK 250,000 in the first three years, ISK 125,000 in the following two years).
- If Guðrún passes away before Magnús, his pension payments will continue at ISK 350,000 per month. In addition, a spouse pension is added, which is based on ISK 200,000 (ISK 100,000 per month for the first three years, ISK 50,000 per month for the following two years.)
Main points regarding the division of pension rights between spouses:
- Valid only for the cohabitation period
- You can choose whether the division covers accrued rights, future rights or both options
- The division only covers accrued rights while the marriage or cohabitation has lasted or will last
- Must be applied for before age 65
- Division does not include disability or spouse pension rights
- It is not possible to apply for the division of retirement rights if one or both parties have started receiving a pension
- Both parties transfer the same percentage of their rights
- You can choose a division ratio of up to 50%
- Upon death, the surviving spouse retains rights under the division agreement
- Application is valid for all Icelandic pension funds
Let's talk
The division of rights between spouses is a large-scale and irreversible action and there are many things to consider. We encourage fund members to get advice from the fund before a decision is made.