ICELAND - Two of Iceland’s leading pension funds, Framsyn and Sjomanna, are in the process of negotiating a merger - the merged entity would have two billion dollars in assets.
Exploratory talks began after rules which gave Sjomanna, the Seaman’s pension fund, a special status to reflect the importance of the fishing and maritime sector to the Icelandic economy were changed two years ago to bring it into line with other pension funds.
“Such a merger would increase the services to the members of the enlarged fund,” Framsyn managing director and chief investment officer Bjarni Brynjólfsson. “There is bargaining power in size to it would lower the fees when buying foreign securities.”
“We think that a bigger fund will deliver a better quality of asset management, there would be more people paying into the fund and we make a good fit,” says Sjomanna managing director Arni Gudmundsson.
Both pension funds have similar subscribers, with Framsyn being the pension fund for blue-collar workers in the Reykjavik metropolitan area, and they are of similar size, Framsyn being a little over one billion dollars and Sjomanna a little under.
If successful, the talks are expected to conclude in the autumn, with a ballot for members to approve the initiative in November or December and the merger being implemented at the end of this year or the beginning of 2005.