Baugur and FL-Group to set up own pension fund? Skip to content

Baugur and FL-Group to set up own pension fund?

According to Icelandic National Broadcasting Service, RÚV, the chairman of the union VR Gunnar Páll Pálsson claims certain “parties in the business community” have threatened him that they will “form pension funds or have their employees transfer to other unions” unless VR’s pension fund does their bidding.

Separately RÚV also reports that the management of FL-Group and Baugur has assigned a “panel of experts” the task of investigating Icelandic pension funds and to look into the possibility of forming a pension fund for their own employees. Last year 48 thousand individuals made pension contributions to VR’s pension fund, and employees of Baugur and FL-Group ranked among the largest groups contributing.

RÚV reports that FL-Group was not happy with the decision of VR’s pension fund to offer the fund’s shares in the investment bank Straumur-Burdarás for sale at the same time as FL-Group was purchasing a large stake in connection with a proxy fight at Straumur-Burdarás.

RÚV quotes FL-Group CEO Hannes Smárason saying that the management of FL-Group and Baugur was interested in learning how the pension funds operated because they were important participants in the Icelandic equity markets. Therefore [the management of FL-Group and Baugur] had decided to have the pension funds’ operations and legal framework investigated.

Gunnar Páll said to RÚV that Iceland had a good pension fund system, and that pension contributions were the property of the employees. It was up to the employees to decide where to keep their pensions, not the management.

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