Gildi Pension Fund was created in 2005 by the merger of Framsýn Pension Fund and the Seamen’s Pension Fund. The lead-up to the merger was short, or just over a year, because in April 2004, the boards of the two funds entered into an agreement to have the feasibility of a merger investigated. A discussion committee was appointed, and following its work, a merger was approved at the Annual General Meetings of Framsýn Pension Fund and Seamen’s Pension Fund, which were held on 27 April 2005. After the AGMs, an inaugural meeting was held where it was agreed that the new fund would be named Gildi Pension Fund and that it would officially begin operations on 1 June 2005. Árni Guðmundsson was subsequently appointed Managing Director, and he managed the fund until the end of 2023.

Gildi’s first Chairman of the Board was Ari Edwald, and in his address to fund members in the fund’s Annual Report after the first year of operation, he said about the merger: “I think it is already the opinion of most people that the merger of the funds was a stroke of luck.” In his address, Ari spoke about the importance of strengthening the Fund’s ability to manage assets in a complex environment where a larger part of the Fund’s assets will need to be invested abroad and developed risk protection needs to be applied. “Last but not least, the goal is for the Fund to provide good service and for its operation to be as cost-effective as possible,” he also said.

The first Board of Directors of Gildi Pension Fund. From left: Sigurður Bessason, Konráð Alfreðsson, Friðrik J. Arngrímsson, Þórunn Sveinbjörnsdóttir, Chairman Ari Edwald, Höskuldur H. Ólafsson, Vice-Chairman Helgi Laxdal and Sveinn Hannesson.

At the end of May 2014, the Board of the Westfjords Pension Fund approached the Board of Gildi and requested formal discussions on the merger of the funds. Gildi’s Board agreed to the request, and after negotiations that took place in late summer, the merger agreement was approved by the boards of both funds on 19 September. The merger of the funds came into effect on 1 January 2015. In the address of Þorstein Víglundsson, the then Chairman of the Board, in the Fund’s Annual Report for 2015, he said, among other things: “The merger has gone well, and I believe that it will be beneficial for fund members. It is clear that the operation of smaller pension funds is comparatively somewhat more expensive than larger funds such as Gildi, and the former members of the Westfjords Pension Fund will benefit somewhat from the merger. The joint fund will be stronger.”

Solid Foundation

If you look back even further, you can see that Gildi Pension Fund is based on an old but solid foundation. The Seamen’s Pension Fund was established by law in June 1958 and began operations the same year. The prelude to the establishment of the fund was that in 1957, there was a major wage dispute between trawler fishermen and fisheries. In order to mediate the dispute and prevent a direct price increase or a strike, the government reached an agreement with the Reykjavík Seamen’s Association and promised to work for the establishment of a special pension fund for trawler fishermen in exchange for them not terminating the purchase and wage agreements.

The Framsýn Pension Fund began operations on 1 January 1996. It was created by the merger of the Dagsbrún and Framsókn Pension Fund, the Hlíf og Framtíðin Pension Fund, the Sókn Pension Fund, the Factory Workers’ Pension Fund, the Restaurant Employees’ Pension Fund and the Industrial Workers’ General Pension Fund. All these funds had a long and interesting history.

Size and Scope

When the size of pension funds is assessed, their net assets are usually considered. Based on that measure, Gildi is the third largest pension fund in Iceland. But the portfolio only tells part of the story. The number of fund members also has a significant impact, as it is necessary to keep track of the rights of all those who have rights with the fund, collect premiums from active fund members, process applications from those who want to start receiving pensions, grant loans, and more. Taking into account individuals who have paid contributions and earned entitlements, Gildi is the largest pension fund in Iceland by membership.

Number of Fund Members:

Board of Directors and Member Associations

The Fund’s Board of Directors has eight members. Four are elected on behalf of fund members and four are nominated by the Confederation of Icelandic Employers. The term of office is two years, and half of the seats for Board members and alternates are voted for annually. Representatives of fund members and employers chair the Board alternately for one year at a time. The Board is in charge of the fund and must discuss all major decisions regarding Gildi’s strategy and operations.