Rules on the reimbursement of contributions to foreign citizens

Please note that rules of reimbursement may vary between pension funds

1) Reimbursement of contributions is not permitted to those who are either citizens of, and/or domiciled in the following countries:

  • EFTA-countries: Iceland- Liechtenstein - Norway - Switzerland.
  • EU-countries:
    Austria - Belgium - Bulgaria - Croatia - Czech Republic - Cyprus (the Greek part) - Denmark - Estonia - Finland - France - Germany - Greece - Holland - Hungary - Ireland - Italy - Luxemburg - Latvia - Lithuania - Malta - Poland - Portugal - Romania - Slovak Republic - Slovenia - Spain - Sweden.
  • United States of America.

2) A fund member with citizenship within the EEA at the time when payments took place has no right to a reimbursement of contributions. Note that for UK citizens, this means that reimbursement of contributions made before January 1, 2021, when the UK was a part of the EEA, is not permitted. However, for contributions made from January 1, 2021, UK citizens are entitled to a reimbursement according to the below rules.

3) A member with double citizenship, one within the EEA, has no right to reimbursement of contributions.  

4) In cases where a foreign citizen has the right to reimbursement of contributions, the following rules shall apply:

  • If the period of contribution payment is less than three years, so that the right to a current valuation of disability benefits has not been established, the foreign citizen shall recover both his own and his employer's contribution.

  • If points have been accumulated for more than three but less than five years, thus establishing the right to a current valuation of disability benefits, the proportion of recovery shall be based on the following table of the Association of Icelandic Actuaries, where the age of the foreign citizen at the time of recovery is of main importance. 

Table from the Association of Icelandic Actuaries

Age range   Reimbursement ratio 
 - 29  100%
 30-34     95%
 35-39  90%
 40-44  85%
 45-49  80%
 50-59   75%
 60-64  80%
 64 -  85%

 Age is based on the time of reimbursement.

  • Pension rights for those years that do not grant a right to a current valuation of disability benefits shall be reimbursed without a deduction in respect of insurance risk.

  • Pension rights accumulated after this period are multiplied in accordance with the above table of the Society of Icelandic Actuaries. 

Department B
If the period of contribution payment is less than five years the foreign citizens shall be reimbursed both his own contribution as well as the counter-contribution of his employer.

Departments A and B
If the period of contribution payment exceeds five years, the reimbursement shall be in accordance with the assessment of the fund's actuary. 

5) Reimbursements are always calculated with reference to the consumer prices index. Reimbursements do not carry interest. 

6) The following documents must accompany the reimbursement application:

  • A confirmation from an employer of the termination of employment.
  • A copy of a passport.
  • A copy of or confirmation of a passenger ticket.
  • The number of an Icelandic bank account.

 7) Taxation shall be handled in accordance with rules that apply to the reimbursement of contributions. In cases of such reimbursements, the sum is subject to personal income tax.

Please note that in order for the reimbursement to take place, the applicant must turn in a confirmation of a permanent residence from one's native country 3 months after submitting the application. Should all documents be sufficient at that time, the applicant will receive the reimbursement.

Application