1 March 2023
The meeting of twenty pension funds, the largest owners of the ÍL-fund’s bonds, does not consider it a basis for negotiations with the Ministry of Finance regarding the settlement of the fund’s obligations. The representatives of the ministry have not met the demands of the pension funds for full performance by the Icelandic government in its search for a possible settlement.
The Icelandic government has unlimited liability for all the obligations of the ÍL Fund. The finance minister’s plan for liquidation and settlement of the fund’s obligations without regard to future interest payments includes a reduction of property rights that violates the provisions of the constitution and the European Convention on Human Rights. There is a detailed, reasoned legal opinion of LOGOS legal services and Róberts Spano, former president of the European Court of Human Rights. The finance minister’s ideas about a settlement that does not include full performance by the Icelandic state are therefore unacceptable.
The finance minister’s answers in Althingi on the matter last week are surprising in terms of comments that an agreement on the reduction of assets is not being requested. Announced measures in connection with the liquidation of the ÍL fund, which aim to significantly reduce the financial obligations of the Icelandic state through legislation, if no agreement is reached, will result in tens of billions of ISK in losses to the pension funds and thus to the public in the country in the form of lost pension rights. It appears that all such actions would be tried in court.
The pension funds have extensive statutory obligations towards their principals, fund members. These obligations exclude the conclusion of an agreement of the type contained in the Ministry of Finance’s scheme. As long as the basic demands of the pension funds for full performance are not met, negotiations with the Ministry of Finance therefore serve no purpose. There is full consensus among the funds about that.Source: Brú Pension Fund
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