Bill on Access to Supplemental Pension Savings Changed Skip to content

Bill on Access to Supplemental Pension Savings Changed

The government’s bill on granting people access to their supplemental pension savings has been changed, according to wishes from the pension funds, so people will not be able to withdraw amounts as high as originally planned.

According to the amended bill, the owners of supplemental pension savings accounts will have the opportunity to withdraw ISK 1 million (USD 8,800, EUR 7,000) spread over six to nine months to cope with their financial difficulties, Fréttabladid reports.

Prime Minister Jóhanna Sigurdardóttir. Photo by Geir Ólafsson.

Prime Minister Jóhanna Sigurdardóttir and Minister of Finance Steingrímur J. Sigfússon revealed at a press conference yesterday that individuals will be able to withdraw ISK 75,000 (USD 657, EUR 521) per month from their supplemental pension savings and couples the double amount.

The withdrawal will not compromise unemployment benefits and it will not be exempt from taxation. There are no conditions on how the amount should be spent.

“It is up to you whether you want to use it to pay down overdrafts, buy food for your children until spring, pay down your mortgages or whatever you want to do,” said Sigfússon. “This money belongs to those who withdraw it and they must therefore also have the right to choose how to spend it.”

Steinunn Valdís Óskarsdóttir, vice-party group chairperson for the Social Democrats, said it is clear that this solution differs considerably from the original proposal, “But this is likely to be helpful nonetheless.”

Óskarsdóttir said she had hoped that account holders would have been able to withdraw the entire amount at once, but that hadn’t been possible because the pension funds aren’t able to cope with such high payments.

However, the smaller amounts that people will be able to withdraw on a monthly basis will still suffice to cover smaller debts such as overdrafts and credit card bills, Óskarsdóttir hoped.

MP for the Independence Party Ólöf Nordal, who was a member of a task force appointed by the former Independence Party-Social Democrat coalition to prepare the bill, is disappointed with the amendments. “I don’t think it’s going to make much of a difference.”

Click here to read more about granting access to supplemental pension savings.

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