The merger of Icelandic pension funds Gildi and Festa has been approved at the extraordinary annual general meetings of both funds.

The merger was approved by a substantial majority at Festa’s extraordinary annual general meeting on 4 November, followed by approval at Gildi’s meeting on 5 November.

The combined fund will be the largest in Iceland by members and the second largest by assets, with approximately ISK 1,570bn in assets based on the funds’ positions at the end of 2025.

Subject to the necessary regulatory approvals and assuming no changes to the current plans, the merger is scheduled to take effect on 1 January 2027, with the combined fund retaining the name Gildi.

However, the merger remains subject to approval by the Competition Council.

Amendments to the funds’ articles of association required to complete the merger must also be confirmed by Iceland’s Minister of Finance and Economic Affairs, following an opinion from the Financial Supervision Department of the Central Bank of Iceland.

Commenting on the merger, Gildi Pension Fund CEO, Davíð Rúdólfsson, said: “We are extremely pleased with the outcome, as we anticipate the combined fund will be stronger and more robust, with a larger asset portfolio that creates a better foundation for good long-term returns.

“Unitholders of both funds will enjoy the benefits in due course, through both more cost-effective operations and an enhanced level of service. We estimate that the cost synergies from the merger could amount to up to ISK 1.2bn per year once it is fully realised.”

This merger comes amid a broader wave of consolidation in Iceland’s pension market over the past two years.

Most recently, Icelandic pension funds Frjálsi Pension Fund and the Farmers’ Pension Fund (LSB) merged after the Icelandic Competition Authority approved the merger and the Ministry of Finance and Economic Affairs confirmed amendments to the funds’ articles of association.

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