Iceland’s Competition Authority (SKE) has approved the merger of the Frjálsi Pension Fund and the Pension Fund of the Icelandic Dental Association (LTFÍ).

The two pension funds were set to merge by the end of 2025 following member approval in November 2025. However, this was delayed pending an investigation by SKE.

According to an update from Frjálsi, the merger is now imminent as SKE has now completed its review without intervention.

The merger was initially announced in October 2025, when the two boards agreed to consolidate the funds. The merger will see Frjálsi take over all rights and obligations of LTFÍ fund members.

As of 30 September 2025, Frjálsi’s assets were approximately ISK 562bn, while LTFÍ held around ISK 11bn in assets. The negotiations for the merger began at the end of June 2025, after which a detailed review was carried out to see if the merger was feasible.

The boards of the funds believe that a merger will strengthen the operational basis of the funds and is beneficial to the members of both funds.

“Frjálsi and LTFÍ are very similar in structure, as the mandatory contributions of fund members are divided into private and joint insurance, which has given the funds a certain special status over most other pension funds,” the funds previously stated.

This agreement to merge follows a wider long-term trend of Icelandic pension funds consolidating, with Akureyri Employees' Pension Fund and Brú Pension Fund confirming they have merged earlier this month, following board approval.

This was Brú’s second acquisition within a year, as at the beginning of 2024, it merged with the Reykjavík City Employees' Pension Fund.

In addition to Brú’s mergers, in September, Lífsverk and Almenni signed a merger agreement to create an ISK 667bn fund from 1 January 2026, which has now been completed.

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