The result matters: a strong long-term rate of return
The second pension pillar was launched in Estonia in 2002. LHV has shown the best rate of return among pension funds that were started then. Also, we are the number 1 grower of pensions in the past 15 years.¹
We endure crises
The assets of LHV pension clients were better protected during the last economic crisis in 2008-2010, and we’ll do everything to make sure that today’s economic downfall has as little effect as possible on savings.
We aim for the greatest possible long-term rate of return. A high long-term rate of return, however, can only be achieved if big losses can be avoided.
Unique solution for the green saver
LHV is the only bank offering a hybrid fund in Estonia, the investment strategy of which is distinguished by a green approach. LHV Pension Fund Green invests the assets of savers based on the principles of responsibility and environmental friendliness: the portfolio consists of investments that are green, sustainable, climate-friendly and resource-efficient, or have a significantly smaller greenhouse gas footprint than other investment opportunities.
Successful and distinctive index fund
If you prefer low costs when it comes to saving for your pension, and you are of the ‘subscribe and forget’ belief, you probably already know that the investment portfolio of LHV Pension Fund Index has almost three times more emerging markets in its portfolio than its competitors. This makes the fund’s rate of return more pronounced and provides the fund with greater receptiveness to the opportunities offered by the world economy.
We invest where you can’t invest on your own
Over the past few years, we have increased investments in alternative asset classes such as real estate, the forest, loans issued to local companies, and private capital funds. We see great potential in the local commercial property market, where the rates for rental income exceed the interest rates for bonds and bank deposits by several times. We compete with international banks as well as banks operating in Estonia to finance companies with ambitions for growth along with local governments.
We develop Estonia’s economy
The total volume of investments associated with Estonia is nearly EUR 410 million, meaning that every third euro of the assets within LHV’s pension funds participates in growing Estonia’s economy.²
We know our country and entrepreneurs, which makes us better able to assess the local risks and opportunities. Operating on the domestic market has its advantages. We try to find companies and areas where the long-term investment of pension funds could promote new development and thereby earn our pension fund clients a higher than average income.
During the period of 1 July 2020 to 31 August 2021, contributions to the second pillar from collected social tax have been temporarily suspended. The state granted you the same opportunity.
As a saver and an investor, it is wise for you to continue making contributions:
1. Suspension of the 2% contribution for 9 months decreases the second pension pillar of a person earning an average salary by EUR 843, providing a total saving of just EUR 258 from the person’s 9 month gross salary.*
2. Suspension of the 2% contribution will leave the person without compensation paid by the state in 2023-2024 due to the temporary suspension of the state’s contributions.
3. If the 2% contribution is suspended, the person’s total pension will be lower in the future.
4. The application for suspending the deduction of contributions is irrevocable, the decision cannot be reconsidered later.
*EUR 1433 gross salary, fund’s rate of return being 5% per year in the period 2020-2022.
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Fund performance in previous periods does not constitute a promise or indication of the yield of subsequent periods. The geometric average annual return for the last 2, 3 and 5 calendar years of the pension funds are available here.