State Takes Responsibility for Nursing Home Pensions


State Takes Responsibility for Nursing Home Pensions

Money - Icelandic Króna

Photo: Páll Kjartansson

The Icelandic Ministry of Finance and Economic Affairs, 11 nursing homes, the state workers’ pension fund and the nurses’ pension fund have signed a contract on the state’s takeover of nearly all pension liabilities connected to the nursing homes’ staff using both pension funds.

The contract was written up to resolve financial problems at the nursing homes, which are run by non-profit organizations within the association of welfare services companies.

The takeover of pension liability amounts to around ISK 6 billion (EUR 38.7 million/USD 52.4 million), according to About half of that amount has already been transferred to a state credit account due to the treasury responsibility for liabilities in the B category at the two pension funds.

Alongside the contract, the nursing homes will pay their part of the debts with the pension funds, as well as paying extra pension contributions for staff members working at the affected homes, to avoid the accumulation of any more debt.

In connection to the contract, the debts of several nursing homes will also be paid off. These debts relate to unpaid pension contribution increases to the pension funds which have racked up in recent years.

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