The Labour Market Supplemental Pension Fund (AM-fund)
The Labour Market Supplemental Pension Fund is a collective fund for employers and employees. In Faroese it is called Arbeiðsmarknaðareftirlønargrunnurin, or AM-grunnurin or AMEG for short, and sometimes it is called Samhaldsfasti. The purpose of the AM-fund is to guarantee a labour market supplemental pension for all residents of the Faroes.
All individuals under the age of 67 with full or limited tax liability in the Faroe Islands contribute a percentage of their income to the AM-fund. The fee is automatically withheld from your A-income. At the same time, all employers also contribute a percentage of the wages they pay their employees to the AM-fund. However, employers do not contribute to the AM-fund for individuals employed under FAS and similar systems.
The rate is determined by the Faroese Parliament and is currently set at 3.00% (2020).
Under certain circumstances, exemptions may be given, these are:
- If you have limited tax liability and work on a boat under FAS or on a similar boat.
- If you move to the Faroes and there are less than three years left until you reach retirement age.
- If you are covered by Nordisk Konvention om Social Sikring you may apply for an exemption.
To be eligible to receive full supplemental pension from the AM-fund, you must:
- be aged 67 or older
- be a permanent resident in the Faroe Islands
- you must have been registered in the Faroese national register for at least 15 years while you were between the ages of 15 and 67.
The full labour market supplemental pension is DKK 6,070 a month. However, the size of the payment depends on how long you have lived in the Faroe Islands.
As of 1 January 2023, the labour market supplemental pension is DKK 6,070 a month.
If you live in the Faroes and have been living here for at least three years, while between the ages of 15 and 67, the payment amounts to 1/15 of the full pension for every year lived in the Faroes, up to 15/15.
If you don't live in the Faroes, but have lived here for at least three years, while between the ages of 15 and 67, the payment amounts to 1/40 of the full pension for every year lived in the Faroes, up to 40/40.
The labour market supplemental pension is paid monthly in advance.
If you live in the Faroes, you will receive the pension automatically, so it is not necessary to apply.
If you live outside the Faroes, you must apply for the labour market supplemental pension and enclose a life certificate with the application. You must unasked submit a life certificate to TAKS annually, otherwise the supplemental pension will be stopped. Send it the same month you originally applied for the supplemental pension.
You will find the application and the life certificate under Forms.