[2] Iceland’s first retirement benefits program began in 1909 as a means-tested fund for the elderly poor.
[3] Iceland’s pension system provides higher gross salary replacement rates than most European programs despite its relatively low costs.
[3] Iceland’s pension system is divided into three components which are commonly referred to as the “three pillars approach”.
The first pillar is publicly provided and income tested benefits which are weighted to inflation.
[6] The final pillar is voluntary government approved private pensions which approximately 60% of Icelanders participate in.