A B

Accrual of rights

In LSR's Division A, you pay a monthly premium of 4% of your salary, and in addition the employer pays a premium which is normally 11.5%. In this way, the right to a pension is created, which is paid for the rest of your life, and the right to a disability pension if work capacity is reduced. In addition, the spouse and children may be entitled to receive a spousal and child pension upon the death of the fund member.

16-70 years

Premium payment

60-80 years

Beginning of retirement

Retirement and disability pension

Rights for you

Spouse and child pension

Rights for your family

What are your rights?

Premiums are paid from wage payments from the age of 16 to 70. Each premium payment entitles you to a pension or disability, spousal or child pension according to the fund's rules, but the principle is that the higher the premiums you pay over the course of your life, the more rights you acquire.

On My Pages, you can see what rights you are entitled to today. There you can also estimate your expected retirement based on your current salary and see how your payments will change depending on when you retire.

What can you see on My Pages?

Current pension rights
Pension rights in other pension funds
Estimated rights
Effects of postponing or accelerating retirement
Pension Calculator

Open My Pages

Membership in Division A

LSR is a closed pension fund primarily for government employees. Everyone who receives a salary according to the collective wage agreements of public employees and works for the state, municipalities, and for related or similar employers has the right to membership in LSR's Division A.

In order to meet the membership requirements for Division A, the employer must pay to the appropriate union (see the list on the side) and the employer's matching contribution to Division A must be 11.5%.

Employers who are not considered public bodies can apply to pay to Division A for their staff if these membership conditions are met.

Unions that grant membership to Division A

Member associations of the Federation of State and Municipal Employees (BSRB)
Member associations of the Association of Academics (BHM)
KÍ
Icelandic Nurses Association

Further information for employers

Equal or age-related rights accrual

For the first 20 years that LSR's Division A was in operation, 1997-2017, it was based on so-called equal rights accrual. The way it works is that contributions are equally valuable throughout the working life, whether they are paid early in life or shortly before retirement age.

In 2017, there was a switch to age-related rights accrual, which is the system used by most other pension funds in Iceland. In such a system, the premiums are more valuable the younger the fund members are when they are paid. This is because a premium paid at a younger age accrues longer than a premium paid later. Special rights tables indicate the value of fund members' premiums according to their age.

Difference between even and age-related rights accruals

Further information about age-related and equal accrual

The change in 2017 was implemented so that those who had equal accrual continued it and will continue until retirement, as long as premiums are regularly paid to Division A of LSR. If contributions are discontinued for 12 months or longer, the right to equal accrual is forfeited. If contributions to Division A resume later, it will be done with age-related accrual. However, it is permitted to extend the period by 12 months due to education, illness, or parental leave. The right, however, always remains valid if an employment relationship exists, e.g., during unpaid leave. A fund member also retains equal accrual if they start paying into Brú pension fund.

Age-related accrual provides the most rights in younger years, but then the rights obtained for each króna paid decrease with age. Equal accrual is equal throughout life. This means that early in life, age-related accruals provide more rights than equal accruals, but in middle-age this reverses and equal accruals become more valuable than age-related accruals.
If you are already paying into age-related accruals, it will remain unchanged for the rest of your working life, because it is not possible to switch to equal accruals. If, on the other hand, you are paying into equal accrual, you should keep in mind that in the second half of your life, pension premiums are usually more valuable in equal accrual than age-related. In this way, you will receive more premium rights from now on by continuing to pay into equal accruals.
Employees who have equal accrual with employers who are not traditional government institutions - i.e. those not financed in the majority by tax revenue - statutory service revenue or donations, can continue equal accrual. Then their employer has to pay a special premium that comes in addition to the traditional premium.
This premium varies and you can find more information about it on the employer information pages. If the special premium is not paid, the fund member's rights are calculated in age-related accruals.