Payouts due to age
Payment of the specified private pension can begin at the age of 62, and payments must be spread out at a minimum until the age of 67. If a member's balance is below a certain threshold amount, a lump sum payment of the total balance can be requested. The reference amount is ISK 1,827,378 based on December 2024 and changes in proportion to changes in the consumer price index.
After reaching the age of 67, the total balance of the specified private pension is available for disbursement. Monthly payments of the specified private pension are processed on the 1st of each month. The application must be received by the fund by the 25th of each month. Income tax is deducted at the time of payment.
Specified private pension payouts
Payouts due to disability
If a fund member is declared disabled before the age of 62, it is possible to have specified private pension savings paid out. The balance is then spread evenly over 7 years based on 100% disability. If disability is assessed as less than 100%, the annual payment is reduced in the same proportion and the payment period is extended accordingly.
A fund member that has acquired the right to a payout due to disability can request a payout in a lump sum if the balance is below a reference amount, which is the same as for payments due to age (see above).
Payouts due to death
The specified private pension is inherited and is available for payment upon the death of a fund member and is paid directly to the legal heirs. Income tax is deducted from the specified personal pension when paying to the heirs, but not inheritance tax. Heirs have to apply for the division of private pension, but have the option of keeping the balance and continuing to use it or apply for a payout. If there are no legal heirs, the specified private pension goes into the estate.