Two Icelandic pension fund mergers have been approved by fund members, as the trend of consolidation in the Icelandic market continues.

Members of the Lífsverk and Almenni pension funds approved their merger, while members of the Pension Fund of the Icelandic Dental Association (LTFÍ) and Frjálsi Pension Fund also backed the merger of their funds.

At Almenni, 1,605 fund members voted and 87 per cent approved the proposal, while 929 Lífsverk fund members voted and 81 per cent approved the merger.

The funds will be merged on 1 January 2026, and the new fund will be known as the Almenni – Lífsverk, pension fund. This is subject to approval from the Competition Authority, and the Ministry of Finance and Economic Affairs confirming the articles of association of the merged fund.

The accrued old-age, disability and spouse's pension rights of Lífsverk fund members will be transferred to the merged fund, but from the beginning of next year onwards, contributions will form the basis for new rights.

In a statement, Lífsverk managing director, Jón L. Árnason, said: "We believe that this will be a positive step for fund members for the future and that a merged fund offers great opportunities. At the same time, we at Lífsverk have experienced great support and loyalty from fund members to their old fund, which is something to be grateful for.

“We would also like to express our gratitude to those who voted in the election and those who have worked on the merger since last spring, not least the board and employees of Almenni Pension Fund.”

LTFÍ and Frjálsi Pension Fund will also be merged by the end of the year. It will see Frjálsi take over all rights and obligations of LTFÍ fund members, provided that the Ministry of Finance confirms changes to LTFÍ's articles of association.

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 stated.

It follows a long-term trend of consolidation in the Icelandic market. A recent report published by the Central Bank of Iceland noted that 96 funds operated in 1980 but just 21 remain, which would drop to 20 once this is approved.

The three largest pension funds control around half of the total pension fund assets in Iceland.

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