The planned cut in government contributions to equalize the disability burden of pension funds has been significantly reduced. This can be seen when looking at the proposals for changes to the budget bill for 2025, which were submitted and presented last Monday. It is a great cause for celebration for workers, but its pension fund, Gildi, bears the greatest burden of pension funds in this regard due to the higher incidence of disability among hard workers.
When the outgoing government’s budget bill was submitted to Alþingi on September 10, it contained plans to eliminate contributions from the state to equalize the disability liability of pension funds in two years. In that context, plans were made to drastically cut the contribution in next year’s budget, by almost 4.7 billion ISK.
Efling vehemently objected to this, along with ASÍ and the workers’ pension fund, Gildi. If the cut had been successful, it would have hit Gildi the hardest, and the fund’s member’s rights would have had to be reduced by approximately 5 percent.
The board of Efling passed a resolution strongly opposing the plans. The cuts would reach into the pockets of workers without any consultation or other reforms to equalize the rights of classes within the pension system. The five funds with the greatest disability burden would have to continue to get at least the full disability contribution.
“If these plans of the government go ahead in full, the board of Efling, the negotiation committee, and the board of confidants will face it with all their weight,” the resolution also said.
The government’s contribution to the current year’s budget to equalize the disability burden of the pension funds amounts to 7.2 billion ISK. In the original draft budget, that amount was to be cut to 2.5 billion ISK. However, in the proposed amendments to the bill, which were presented on Monday, two billion ISK have been added, and the state’s contribution will therefore be 4.5 billion ISK next year if the bill is approved as amended.
The government’s contribution is still to be cut, but a contribution of ISK 4.5 billion is sufficient to maintain the full contribution to the five pension funds that have the greatest disability burden. Advocates of the pension funds and ASÍ had already agreed that contributions to those funds that do not bear a significant burden due to disability could be cut. It is therefore to be celebrated that it has been possible to protect the status of the funds that bear the greatest disability burden, to the benefit of, among others, Gildis’ fund members, workers in Iceland.