Iceland’s Akureyri Employees' Pension Fund (LSA) and Brú Pension Fund have confirmed that the two funds have merged following board approval, continuing the trend of consolidation in the Icelandic pensions market.

The merger, which has been effective since 1 January 2025, has seen a new department in Brú created for LSA, known as Division E. As a result, the assets and liabilities of LSA are completely separate from the other assets and liabilities of the fund.

In addition, the rights and entitlements of LSA fund members remain unchanged.
The decision to merge was first announced in December 2024, with confirmation coming today (7 October) that it has been finalised.

It’s the second acquisition for Brú within a year, as at the beginning of 2024, it merged with the Reykjavík City Employees' Pension Fund (LsRb), which also resulted in the creation of a new department at Brú, the R Division, which manages LsRb's operations, assets, liabilities, and obligations.

The net assets of LsRb at the beginning of the year were ISK 91.6bn, which were merged with Brú's assets. Brú Pension Fund achieved a real return of 7.8 per cent in 2024, up from a return of 2.4 per cent in 2023.

This latest announcement 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.

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

Last week (29 September) the pension funds, Lífsverk and Almenni, signed a merger agreement to create an ISK 667bn fund from 1 January 2026.

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