Iceland’s Pension Fund of Commerce (Lífeyrissjóður verzlunarmanna, LV) and Birta Pension Fund, the second and fourth biggest pension funds in the North Atlantic country, have announced they will discuss a potential merger – a fusion that would create by far the largest Icelandic pension fund.
Yesterday’s statements from both pension funds, which come amid a flurry of mergers in the Icelandic pension fund sector, read: “The boards of Birta Pension Fund and Lífeyrissjóður verzlunarmanna have decided to initiate exploratory discussions to assess the feasibility of a possible merger of the funds.”
With ISK1.46trn (€10.0bn) in assets at the end of 2024, LV is only slightly smaller than Iceland’s largest pension fund LSR, which had ISK1.57trn at the same point.
Since Birta had ISK669bn of assets at the end of 2024, a merged LV/Birta pension fund would have at least ISK2.13trn under management – making it a similar size internationally to Denmark’s pension fund for doctors, Lægernes Pension, and the German pension fund of chemicals corporate BASF.
The boards of Birta and LV said in their statement that the two pension funds had “a long and successful operating history that had delivered solid benefits to their fund members and contributed to financial security upon retirement”.
Discussions between the two institutions would examine whether there was a basis for initiating formal discussions on a merger, they said.
“This involves assessing whether a merger would be suitable to further strengthen their operations, including through increased operating efficiency, stronger infrastructure and improved service to fund members,” they added.
“Thus, a merged fund would be even better positioned to be a solid and powerful supporter of fund members in the long term,” the two funds said.
Iceland’s pension fund sector has been gradually consolidating since the 1980s, and 2025 saw news of several new mergers, including membership approval for the merger between Almenni and Lífsverk, which took effect at the beginning of this year.
Frjálsi’s merger with the Icelandic Dental Association Pension Fund (LTFÍ) was approved by the latter fund’s members late last year, while Frjálsi and Iceland’s Farmers’ Pension Fund (Lífeyrissjóður bænda, LSB) decided to start formal discussions on a possible fusion.
Assuming these mergers and the potential LV/Birta union do come about, Iceland’s pension funds sector would in future consist of just 15 pension funds, compared to 96 funds in 1980 and 62 at the turn of the millennium.
