The boards of Iceland’s Gildi Pension Fund and Festa Pension Fund have agreed to a merger.

The merger agreement will be submitted to the extraordinary annual meetings of both funds for confirmation in early November.

If the merger is approved at the meetings, the combined fund will be the second largest in Iceland by assets, with approximately ISK 1,600bn in assets based on the funds’ positions at the end of 2025.

The merged fund would be the largest in the country by membership, with a combined total of around 400,000 members.

Discussions about a potential merger of Gildi and Festa began in June 2026, with the boards’ joint assessment concluding that the combination could create a range of benefits for members of both funds.

These benefits included increased economies of scale, a stronger operating basis, more robust service to fund members, and increased support for technical and digital development.

The boards believed the merger would create better conditions for long-term returns and strengthen the ability of the merged fund to secure the interests and services of members.

“The funds are comparable in many respects, including in terms of fund member groups, benefit systems and actuarial assumptions,” the pension funds stated.

“These similarities create favourable conditions for successful integration and increase the likelihood that the benefits aimed for by the merger will be passed on to fund members.”

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