Icelandic pension legislation stumbles in parliame

A bill raising the Icelandic government’s contribution to the civil servants’ pension fund and extending the pension rights of the self-employed has been delayed in parliament, the Althingi.
Under the proposal, the government’s contribution to State Employees Pension Fund was to be raised to 8% of a civil servant’s salary from 6%. Public employees contribute 4%.
The bill was going to cover marginal groups, including the self-employed and workers who are not members of trade unions, who pay into the Collection Pension Fund. It would have lifted the contribution paid by their companies or employers to 8% from 6%, boosting those individuals’ rights, according to a trade union official.
“The trade unions did not oppose the bill but we pointed out that this was a right that our members had had to negotiate through collective bargaining and ‘buy’ by forgoing a increases in wages not be granted by law,” he adds.
The intervention also raised legal issues about whether the government had the ability to legislate pension rights for groups working for private companies and were not bound by collective agreements.
Following the intervention finance minister Árni Mathiesen postponed consideration of the bill.
Meanwhile, an increase in the contribution rate for Iceland’s private sector industry-wide pensions to 12% of an employee’s salary from 11% may be under threat as a result of an rise in the Icelandic inflation rate.
The increase was due to come into force at the beginning of next year
with the lifting of the amount paid
by an employer to 7% from 6%.
The employee contribution would stay at 4%.

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