The boards of Icelandic pension funds Almenni and Lífsverk have decided to go ahead with the merger they have been exploring, signing an agreement which could lead to a new, larger pension fund from the beginning of next year.
In a statement on Friday, the two pension funds said: “The merger of the pension funds aims to create a stronger foundation for good pension rights, and to create a larger fund that will be better equipped to meet increased demands and provide better service.”
They said the goal of the planned union was also to achieve operational efficiency that could contribute to lower costs and higher returns to fund members.
“Proposals for the merger will be presented separately at fund member meetings in October and on the funds’ websites,” said Almenni and Lífsverk.
The move by the two pension funds to merge is the latest in the gradual process of consolidation in Iceland’s substantial occupational pension system of individual pension funds. Since 1980, the number of pension funds in Iceland has reduced to 21 funds from 96, according to figures from Iceland’s central bank.
The next step for Almenni and Lífsverk now is for proposals to be formally submitted to fund member meetings at both pension funds on 11 November, the two schemes said, and for fund members to take a position in electronic elections from 11 to 13 November.
The merger will also need the Ministry of Finance and Economic Affairs to confirm changes to the articles of association of both funds, according to Friday’s announcement.
“If the proposals are approved, the merged pension fund will begin operations on 1 January 2026,” the two pension schemes said.
Almenni is much larger than Lívsverk, with total assets of ISK477bn (€3.36bn) at the end of 2024, compared to the latter’s ISK190.1bn. A merger between the two is set to create Iceland’s fifth-largest pension fund, according to IPE’s 2025 ranking of European pension funds, elevating Almenni’s current status as the country’s number seven pension fund in terms of assets under management.
With €4.7bn of assets, according to the end-2024 figures, the merged fund would be only slightly smaller than the current number four, Birta, which itself was created from a merger nearly ten years ago, when Icelandic pension funds Sameinaði and Stafir were united.
The two Reykjavík-based pension funds announced back in March that they were in talks to merge.
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