More progress is needed on legislative changes to enhance pension fund governance, internal risk controls, and risk management, a report from the International Monetary Fund (IMF) has claimed.

The statement was made as part of the IMF’s annual ‘Article IV’ report on the Icelandic economy, which acknowledged that while steps had been taken to strengthen the supervision of pension funds, more progress was needed.

The report added that focusing on incremental changes rather than comprehensive reforms may help facilitate this progress.

The annual report also suggested that, to help bolster Iceland’s growth prospects, identifying opportunities for Iceland’s pension funds to scale up their infrastructure financing consistent with their fiduciary duties could help complement these efforts.

However, the IMF emphasised that care should be taken to contain any increase in fiscal risks.

The report concluded that IMF staff welcomed the “significant progress” in implementing the 2023 financial sector assessment program (FSAP) recommendations.

Reg­u­lar re­ports on the status and pro­spects of the eco­nom­ies of IMF mem­ber coun­tries are is­sued based on Art­icle IV of the IM­F‘s art­icles of agree­ment.

To monitor progress, a mis­sion from the IMF vis­ited Ice­land last May for dis­cus­sions with the Icelandic au­thor­it­ies and other stake­hold­ers.

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