Membership
Division V is open to everyone and provides comparable rights to pension funds in the general pension fund system. If you would like to be a member of Division V you must notify your employer and if you would like to divide premiums you can submit the application below.
If you are already a member of Division A you can choose to move to Division V at any time. However, you cannot change back to Division A. If you wish to move to Division V please submit the application below.
Apply for Division V and to divide premiums
How do I move from Division A to Division V?
Employer provides a minimum 11.5%, you provide 4%
Premium payments are payments you make to Brú Pension fund out of you monthly wages. Payments can vary, but they now stand at 15.5%.
Divide premiums
You can choose to allocate premiums over 12% into a personal pension savings. Out of 15.5% premium you can allocate 3.5% into a personal pension savings. You are required to make an agreement with a personal pension fund, as Brú does not currently oversee any personal savings.
Application to divide premiums
Rights aquired
By paying premiums you accumulate rights to lifelong pension, spouse pension, child pension and disability pension. Division V measures rights by the age and return of premiums, meaning that the longer a premium payment gives returns results in increased rights.
See your accumulated rights in Lífeyrisgátt
More information about retirement
Lifelong pension
- You can choose to begin receiving pension from ages 60 to 80.
- You do not need to be retired to begin receiving pension payments.
- Pension is according to your aquired rights and is indexed to CPI.
- Lifelong pension is lifelong and paid to you monthly.
- Aquired rights are according to premium payments, age, and returns.
- If you choose to begin receiving pension earlier, the estimated pension amount is decreased for each month you choose to bring forward.
- If you choose to begin receiving pension later, the estimated pension amount is increased for each month you move back.
Spouse pension
If a fund member dies, the spouse is entitled to spouse pension for two years, granted that the fund member was an active member before passing or had begun receiving pension payments.
- Spouse pension is 50% of the fund member's projected rights.
- Spouse pension is valid for 24 months after passing.
- If the spouse has children younger than 18 years of age, the spouse pension is maintained until the youngest child reaches the age of 18.
- If the spouse is more than 50% disabled and younger than 67 at the time of passing, the spouse pension will be maintained as long as the disability applies.
Child pension
If a fund member dies or becomes disabled, their children are entitled to child pension until the age of 18. Child pension is indexed to CPI.
- Child pension if a member dies or becomes disabled.
- Child pension applies until the age of 18.
- This is a specific amount, indexed to CPI.
- An example of child pension is 25.304 kr. (CPI average of 2023)
Disability pension
If you have paid into the Fund for at least 24 months before disability and been assessed by a doctor to be more than 50% disabled and have incurred a loss of income, you could be entitled to disability pension.
- Disability pension is projected to 65 years of age, given certain conditions are met (based on the rights you would have accumulated, if you had paid premiums up to that age)
- Disability pension is based on the assessed level of disability (for example, 50% disability means 50% disability pension)
- Disability pension is based on the inability to perform the work you employed at the time of assessment, for a period of three years. After that period, your disability is reassessed on the criteria of the ability to perform general work.
- You will need a comprehensive doctor‘s certificate (Doctor‘s certificate for application for disability compensation) that must be made within the last three months.
What are personal pension savings?
Personal pension savings are when you accumulate a sum of money on an account instead of accumulating rights through a mutual insurance system. These savings are private property, typically released at retirement age and go to your spouse and children when you pass. Brú Pension Fund does not offer personal savings accounts but if you are a member of Division V you can divide premiums.
Dividing premiums
This is an option in Division V. When you pay premiums to the fund you can allocate a portion of your mandatory premium to personal savings. Out of 15,5% premium you can allocate 3,5% to personal savings. You will need to apply to Division V and with your application you will need to supply an agreement with a personal savings provider other than Brú Pension Fund.
Membership and Divide premiums in Division V
Additional Pension savings
Additional Pension savings, also sometimes called personal savings, is a voluntary additional savings of an employee with the participation of the employer. You make an agreement with a pension fund or a savings provider where you pay an additional premium of 2-4%, with an additional premium of 2% from your employer.
Accumulating rights
Entitlements are subject to premiums, age, and return.
Division V is age-linked and actuarially set up to consider the return time of contributions, such that the member benefits from the time the premium is invested. The younger you become a member, the higher your entitlement will be.
Good returns on assets translate into higher pension rights.
The agreed-upon conditions for Division V may be changed upon the recommendation of a Brú actuary because of greater impact of rising life expectancy and increased disability on the performance of the fund. The aim of Brú‘s Division V is for future premiums to cover the cost of accrued pension rights. The Fund must cut pension rights if assets are insufficient to cover commitments, but members will benefit if return on assets is good.