Read about how and when you can claim your pension, your payout options, as well as other matters concerning your pension.
The earliest you can start receiving your pension is when you reach the Faroese state pension age.
If you are in the Faroe Islands for fixed-term employment, you can still apply for a refund of your pension contributions when you leave the Faroe Islands. Read more about this under About pensions > Pension refund after fixed-term employment.
To start claiming your pension, you must get your pension provider to notify TAKS at the latest two months before the first payout. The notification to TAKS should state how and when the pension is to be paid.
There are three ways you can receive your pension in the Faroes: as fixed period annuity (lutaeftirløn), life annuity (lívrenta) and capital pension (kapitaleftirløn).
Fixed period annuity
With fixed period annuity, you receive your pension savings in predetermined monthly amounts for a fixed period of at least ten years.
A maximum of 55% of your pension savings can be paid out as fixed period annuity.
Life annuity
With life annuity, you are guaranteed a steady payment for as long as you are alive. How much you receive depends on how much you have saved up and the average life expectancy.
A minimum of 45% of your pension savings can be paid out as life annuity.
Capital pension
With capital pension, you get the full amount of your pension savings, plus interests, paid out in a lump-sum.
A maximum of 15% of your pension savings can be paid out as capital pension.
If your pension savings are worth less than DKK 400,000
If your pension savings are worth less than DKK 400,000, you have some other options apart from the above-mentioned distribution.
If your pension savings are worth between DKK 60,000 and 400,000, you can choose to claim your pension as the above-mentioned distribution, or as 100% fixed period annuity.
If your pension savings are worth less than DKK 60,000, you can choose to claim your pension as the above-mentioned distribution, or as 100% capital pension.
If you have several pensions saved up at different pension providers, you may combine them by authorising one provider to collect the savings from the others.
When someone dies, their collected pension goes to the beneficiary stipulated in the pension contract, unless another agreement has been made.