Lífeyri

Lífeyri is the Icelandic term for pension or retirement income. It encompasses various forms of financial support received by individuals after they cease regular employment, typically due to reaching retirement age. The Icelandic pension system is a mix of mandatory state-funded pensions, occupational pensions, and voluntary private savings.

The primary public pension scheme is managed by Tryggingastofnun (the Social Insurance Administration). This scheme provides a basic pension and potentially an income-tested supplement for those who have met certain residency and contribution requirements. In addition to the state pension, a significant portion of the workforce participates in mandatory occupational pension funds. These funds are often negotiated through collective bargaining agreements between employers and employee unions and are funded by contributions from both parties.

Individuals may also choose to supplement their retirement income through voluntary private pension savings accounts. These accounts offer tax advantages and allow individuals to save more for their retirement beyond the mandatory contributions. The overall aim of the Icelandic system is to ensure a reasonable standard of living for its elderly citizens. Understanding the different components of lífeyri is crucial for individuals planning for their retirement in Iceland.