Iceland’s Pension Fund of Commerce (LV) made an investment return of ISK 103bn in 2025, with assets rising to ISK 1,566bn by the end of the year.

Its full-year results revealed that the return for its mutual fund division was 7 per cent, corresponding to a real return of 3.2 per cent. In comparison, the 10-year real return is 4 per cent.

LV paid out ISK 45bn in pension payments during the year to around 29,000 members, ISK 5bn more than in 2024. In addition, premiums to the fund continued to increase, amounting to approximately ISK 52bn.

LV said that, overall, its assets increased by ISK 108bn in the year.

In terms of investment performance, the pension fund said domestically, both bonds and equities delivered good returns. The fund's domestic equity portfolio delivered significantly better returns than the benchmark index.

The fund's foreign equity holdings in ISK also performed well, despite significant market volatility during the year. Its foreign equity and bond portfolios delivered good returns in their respective currencies, but the depreciation of the USD against the ISK resulted in lower returns in ISK.

Regarding the impact of inflation on the actuarial position of the mutual fund division, LV said the actuarial position was -5.4 per cent at the end of 2025, compared to -4.3 per cent the previous year.

Although portfolio returns had a positive impact on the actuarial position, LV said inflation had a negative impact as fund members' accrued rights are indexed.

In addition, the reassessment of disability and rehabilitation probabilities also had a slight impact on the actuarial position.

However, the pension fund confirmed that the negative actuarial position does not affect the pensions paid and is well within the limits set by law.

Last year also saw LV continue to develop and invest in infrastructure and renew its basic systems. The number of employees also increased slightly to meet the increased service to fund members and the growing demand for education and advice to fund members.

Despite the increased scope of the pension fund's operations, the relative operating costs decreased to 0.13 per cent. LV said its operating efficiency is passed on to fund members.

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