It is despicable for the government to plan to finance a new support system for the employment of the disabled in part by reducing the pension rights of workers. If the government’s plan to cancel the state’s contribution to equalize the disability burden of pension funds in the next two years is carried out, that would be the case.
So says the resolution of the board of the Efling Union, which was approved at the board meeting yesterday, September 24. In the resolution, it is stated that Gildi, the workers’ pension fund, bears the greatest burden of pension funds due to the higher incidence of disability among workers. If the state’s contribution is withdrawn, low-wage workers would have to accept a pension between 200 and 270 thousand ISK lower annually than they would get from other pension funds that have a lower disability burden.
“If the government’s plans go ahead in full, the board of Efling, the negotiation committee, and the board of confidants will face it with all their might,” says the resolution, which can be read in its entirety below.
Resolution of the board of Efling Union approved at a meeting on September 23, 2024:
The government reaches into the pockets of workers to fund a new disability support system
The government has announced that its contribution to equalize the disability burden of pension funds will be canceled in the next two years.
This contribution was agreed upon in the collective agreement between the parties of the labor market and the government in 2005. The workers’ pension fund (Gildi) has the greatest burden due to the higher incidence of disability among hard workers. Gildi has received about 40% of the current contribution to meet this huge burden (which would have had to be more to achieve full compensation). Without the contribution, the retirement pension rights of Gildis fund members would be significantly lower than the average for other pension funds, and even more so compared to the pension funds with the lowest disability burden.
Workers’ pension funds would have to reduce the rights of fund members if the contribution were to be canceled completely. At Gildi, the pension would be about 30,000 ISK less per month than at other funds on average, and about 50,000 ISK less than at funds with the lowest disability burden. TR pensions would only compensate for less than half of this reduction in rights for most people. Low-wage workers would then have to accept about 200-270 thousand ISK less in pension each year than they would receive from other pension funds that have a lower disability burden.
This is completely unacceptable for workers and other low-wage workers. It is despicable for the government to plan to finance a new support system for the employment of the disabled in part by reducing the pension rights of workers and low-wage workers.
Although a new disability support system could be beneficial and reduce the number of disabled people on pensions (which remains to be seen), the uneven disability burden between pension funds will continue to exist and affect the pension rights of low-wage workers most.
The board of Efling considers it unacceptable for these agreed rights to be canceled without consultation or other reforms that equalize the rights status of classes within the pension fund system. The 5 funds that have the biggest burden must continue at least the full disability contribution, subject to the unchanged arrangement of disability pension rights in the pension funds.
If the government’s plans go ahead in full, the board of Efling, the negotiation committee, and the board of confidants will face it with all their might.