Managing director of the Icelandic Pension Funds Association (IPFA) Hrafn Magnússon does not believe that pension funds in Iceland can improve the rights of their members by increasing payments this year due to poor returns last year.
Helgi Hjálmsson, director of the National Association of Senior Citizens, said the news is not surprising. “The main disappointment is that the state does not see that it is reasonable to increase the basic pension,” he told Fréttabladid.
The basic pension is only ISK 25,000 (USD 396, EUR 266) per month and the National Association of Senior Citizens believes it should be increased to at least ISK 80,000 (USD 1,300, EUR 853).
According to the Central Bank of Iceland, the pure assets of the pension funds have decreased by two percent, or almost ISK 33 billion (USD 523 million, EUR 352 million) since November 2007. It is one of their highest falls in one month in ten years and is caused by the plummet of stocks, the Central Bank explained in a report.
However, the pure assets of the pension funds increased by almost ISK 200 billion (USD 3.2 billion, EUR 2.1 billion) from November 2006 to November 2007, which is a 14 percent year-on-year increase, though it is a slower increase than the year before.