Icelandic pension funds Almenni-Lífsverk and SL have decided to start exploratory talks on a merger, potentially creating what would be the country’s fourth-biggest pension fund with combined total assets of ISK1.035trn (€7.2bn). The move is just months after Almenni-Lífsverk implemented its own merger.
In an announcement on Friday, the boards of the two pension funds said: “The aim of the talks is to investigate whether a merged pension fund would create a stronger foundation for favourable and secure pension rights for both funds, improve service to fund members and whether synergies would lead to operational efficiencies.”
“Negotiations are at an early stage but are aimed at being completed by mid-summer,” Almenni-Lífsverk and SL said.
If they agreed, they added, merger proposals and amendments to the articles of association would then be submitted to board and fund member meetings in the autumn, with the aim of the funds becoming one on 1 January 2027.
Iceland’s pension sector, which numbered 96 funds back in 1980, has been consolidating for decades to the point where there are now around 20 pension funds. But merger activity has accelerated, particularly over the last year, and the now ISK727bn Almenni-Lífsverk is itself the result of a fusion which took effect only at the beginning of 2026.
Two weeks ago, Frjálsi Pension Fund signed an agreement to merge with the smaller Farmers’ Pension Fund (Lífeyrissjóður bænda) following negotiations between the two institutions, which began last autumn.
Vala Valtýsdóttir, chair of the Farmers’ Pension Fund, said she was pleased the merger negotiations had ended with the conclusion the two funds would merge, adding: “It is in the interests of the Farmers’ Pension Fund to merge with a large fund such as Frjálsi, which also has a strong operating and asset management company, Arion Bank, which provides good service to fund members.”
However, not all ideas for mergers come to fruition in the Icelandic pensions sector, as evidenced by the stalling last month of early talks between the Pension Fund of Commerce (Lífeyrissjóður verzlunarmanna, LV) and Birta Pension Fund, Iceland’s second and fourth biggest pension funds, respectively.
Without giving details, the two funds – which together would have formed the largest Icelandic pension fund by far – said that after detailed analysis of operations and actuarial assumptions, they decided not to progress to formal merger talks.
