Pension funds join forces over ÍL-sjóður

In view of the significant interests of Icelandic fund members at stake, most of the country's pension funds have formed a joint platform regarding the situation that has arisen over ÍL-sjóður. The Minister of Finance has stated that the state has decided to take action regarding the fund's position, and the largest holders of bonds issued by the fund are pension funds. The funds' representatives consider it appropriate to work together in analysing the funds' position in this matter. Each fund will ultimately make its own independent decision on the matter.

This emerged at a well-attended information meeting that most of the country's pension funds attended today. As previously reported, the Minister of Finance has stated that the state intends to take action regarding the fund's position and that three options are available. First, to continue providing funds to ÍL-sjóður, which the Minister of Finance considers out of the question. Second, to force the fund into bankruptcy through special legislation, in order to be released from the state guarantee. Third, to reach a settlement agreement with bondholders, most of whom are pension funds.

It emerged at today's meeting that there was unanimous support for working together to analyse the situation regarding this matter, given the enormous interests at stake for Icelandic fund members. The law firm Logos has already been engaged as legal adviser to the pension funds, and work is under way to analyse the legal issues, the funds' interests - and thereby the interests of the public - and the further progress of the matter. Financial advisers have also been engaged.