Under investigation. Part 1

1.  The pension funds.

Five pension funds have been diverted to the office of special prosecutor by The Financial Supervisory Authority (FME)of Iceland.

Al the pension funds where already under the supervision of the New Landsbanki when the investigation started. The alleged breach of law took place before the New Landsbanki was founded.

The pension funds are: (Icelandic / English)

Íslenski lífeyrissjóðurinn / The Icelandic pension fund (open to the public pension fund, has a contract with Landsbanki)

Lífeyrissjóður Eimskipafélags Íslands / The Icelandic Eimskip pension fund

Lífeyrissjóður Tannlæknafélags Íslands / The Icelandic Dentist pension fund

Eftirlaunasjóður FÍA / FÍA pension fund (Icelandic Professional Pilots associasion fund)

Kjölur lífeyrissjóður / Kjölur pension fund (rural town council employees)

The reason for this being made public: The ministry of finance had to send an official announcement when the funds where appointed a temporary special legal representative to oversee the procedure of investigating the alleged breach of law. The announcement had to be made to the Icelandic Stock Exchange.

The case is about:

The aim of the investigation is to check if the pension funds went over their investment legal limits in early 2008, and to check if the information about that issue was not correct.

All pension funds have legal obligations to stay withing sensible investments to distribute the risk. Example; They must get 10% in local financial institutions like banks and such. 10% in foreign stable registered companies (fortune 500 for example), local government guaranteed bonds…etc. etc.

It is believed they went over the limits and took excessive risks. Exactly what they did is not clear at the moment.

–The „word on the street“ indicates that they went over the top in investing in banks and companies that where not solid. The banks went over the top in calling people, offering them different pension deals. Some say that the funds where drained before the collapse here in Iceland by the banks. The funds are said to have been gambling with the funds and putting their money on dubious bets like Kaupthing and the other banks and companies related to them.–


About this entry