Several Icelandic pension funds have released their 2024 annual reports, revealing improved returns and better financial positions compared to previous years.

LSR, the pension fund for state employees in Iceland, revealed that its net real return was 7.1 per cent in 2024, more than double the return benchmark for Icelandic pension funds.

The fund's annual report showed that the average five-year net real return was 2.8 per cent in 2024, down from 4 per cent in 2023, and the average 10-year net real return was 4.2 per cent in 2024, down from 4.4 per cent in 2023.

Despite this, the annual report revealed that that he fund's asset portfolio exceeded ISK 1,500bn for the first time in August 2024, making LSR the first Icelandic pension fund to break this barrier.

In total, pension payments from Sections A and B of LSR amounted to just over ISK 102bn. In addition to this, 2024 was the first year in which the fund's payments from mutual insurance funds exceeded ISK 100bn in a single year.

The annual report indicated that the fund had an average of more than 33,000 pensioners in 2024, positioning LSR as one of the largest funds in the country.

LSR found that at the end of the year, the actuarial position of the A-Section was positive by 1.2 per cent, which is the first time since 2016 that the department’s assets exceed liabilities.

Commenting on the fund’s results, LSR chairman of the board, Magnús Þór Jónsson, said: “The year 2024 was a good operating year for LSR after difficult conditions in the markets of the previous two years. It has only been about five years since the asset portfolio reached ISK 1,000bn, and the fund is therefore growing rapidly.”

In addition to this, the pension fund of the Icelandic Dental Association reported that its returns on its assets during the year were “good” with the net real return of both departments, the joint ownership division and private pension division, of the fund being 5.9 per cent.

The average net real return over the past 10 years for the fund was 3.5 per cent in the joint ownership division and 3.1 per cent in the private pension division.

Meanwhile, the deficit in the fund's actuarial position amounted to 3.8 per cent at year-end 2024.

The fund's liabilities amounted to ISK 29,302 for its private pension division, while its liabilities for its joint ownership division amounted to ISK -3,172.

Additionally, the funds’ investments in the private pension division amounted to ISK 7,588,407 at year-end 2024, while in its joint ownership division, investments totalled ISK 2,708,753.

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