Iceland’s Birta Pension Fund and Lífeyrissjóður verzlunarmanna (The Pension Fund of Commerce, LV) have decided not to initiate formal merger negotiations at this stage.

This news follows an announcement at the end of January that the board of directors of LV and Birta Pension Fund were conducting exploratory negotiations on a possible merger of the two funds.

The goal was to assess whether a merger could have increased operational efficiencies and strengthened the infrastructure of both funds.

However, after an in-depth analysis of the funds' operations and actuarial assumptions, the two pension funds have decided not to proceed with a formal merger.

The Boards of Directors of both funds extended their “warmest thanks” to the staff, board members and others who have put in a lot of work to explore the matter, for their contribution.

This announcement follows the long-term trend of increased consolidation in the Icelandic pensions system, with the number of funds in the market dropping from 96 funds in 1980 to only 21 in August 2025, with the three largest controlling around half of total assets.

In May, the Frjálsi Pension Fund and the Pension Fund of the Icelandic Dental Association (LTFÍ) announced their successful merger.

Frjálsi also revealed that it had signed a letter of intent to initiate formal discussions regarding a potential merger with the Farmers' Pension Fund (LSB).

In addition to these developments, Lífsverk and Almenni have also finalised their merger, which was first announced in September.

Furthermore, the Akureyri Employees' Pension Fund (LSA) and the Brú Pension Fund completed their merger in January 2025.

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