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III pillar

Investment in the future on which the state refunds the income tax

  • Ensure your future through the third pillar
  • A wise monthly investment
  • The state refunds the income tax on the investment
Income tax incentive

The state refunds the income tax on the money invested in a third pillar pension fund. The allowance applies to payments that represent up to 15% of your gross income, but not in excess of EUR 6000 per year. For instance, if you invest EUR 100, you will receive an income tax refund of EUR 20 next March.

III pillar funds

LHV Pension Fund Intress Pluss
  • Low risk level.
  • Suitable for risk averse pension savers with little experience in investing in financial markets, with at least 2 years remaining until retirement.
Buy units

Strategy
In the selection of the fund’s investments, low risk and preservation of value is preferred over a potential high yield. The fund’s assets are predominantly invested in debt securities and deposits at credit institutions. The fund does not invest in shares or other equity instruments.

Expenses

Entry fee 0% / Exit fee 1% / Management fee 0.95%

Information about the fund

Volume of the fund (as of 31.10.2017)536,137.05 €

Price of a unit

Management companyLHV Varahaldus

AS SEB Pank

The data is presented as at 31.10.2017

Biggest investments
Tartu Linnavalitsus 10/20325.99%
Lithuania 05/20224.69%
Bulgaria 09/20244.28%
IBM Corporation 11/20204.02%
Korea (Republic of) 12/20213.36%
Lithuania 02/20233.29%
Romania 10/20253.22%
Apple 11/20222.95%
Elering 07/20182.93%
China Development Bank 01/20222.74%
Current asset allocation
Money and deposits51.7%
Government bonds21.6%
Corporate bonds26.8%
Regional distribution
Money and deposits51.7%
The Baltic states22.3%
Europe (excl. the Baltic states)8.6%
Asia6.1%
North America11.4%
LHV Supplementary Pension Fund
  • Medium risk level.
  • Suitable for pension savers aware of investment risks, who wish to make long-term investments in a supplementary funded pension, with the aim of using the accumulated money after reaching the age of 55.
Buy units

Strategy
The fund makes significant investments in equity markets: to ensure maximum growth, the proportion of equity markets is kept close to 75% of the value of the fund’s assets. The proportion of equity markets may also be higher – up to 95% – or lower (in recent years close to 40%), if considered reasonable by the fund manager.

Expenses

Entry fee 0% / Exit fee 1% / Management fee 1%.

Information about the fund

Volume of the fund (as of 31.10.2017)14,126,429.27 €

Price of a unit

Management companyLHV Varahaldus

AS SEB Pank

We will allocate your money into international enterprises, the development of which we believe in. At the same time, it must be taken into consideration that the future of these enterprises depends on both their internal decisions as well as the changes in the global economy.

The data is presented as at 31.10.2017.

Biggest investments
EfTEN Kinnisvarafond6.38%
East Capital Baltic Property Fund II4.09%
Citadele banka 12/20262.69%
Bulgaria 09/20242.49%
PKO Bank Polski 01/20192.27%
JP Morgan Chase 08/20212.17%
Wells Fargo & Company 07/20212.16%
Tallink Grupp2.03%
Tallinna Kaubamaja1.96%
Lithuania 11/20241.96%
Current asset allocation
Money and deposits27.9%
Government bonds10.5%
Corporate bonds22.3%
Real estate11.1%
Shares28.2%
Regional distribution
Money and deposits27,9%
The Baltic states35.1%
Europe (excl. the Baltic states)23.2%
Asia4.7%
North America7.3%
Other1.8%

Finnish companies offered positive surprises

Romet Enok, Portfolio Manager

For stock markets, September provided a good rate of return in Europe, above all, where the stock exchange index rose by 5.3% during the month. The Japanese stock market also rose by 3.6% when measured in the local currency. The rapid increase of prior months on the Baltic stock exchanges came to an end. The Tallinn and Vilnius stock exchange indexes declined during the month by 3.6% and 2.6%, respectively. Only the Riga Stock Exchange showed a small increase of 0.6%, despite the decline in the shares of pharmaceutical manufacturers Olainfarm and Grindeks by 5.7% and 1.4%, respectively. Tallink shares, which had risen sharply during the summer, fell by 7% on the Tallinn Stock Exchange. Arco Vara shares exhibited a positive rate of return against the background of a growing real estate sector, rising by more than 13% during the month. The rate of return for the additional pension fund was also supported by Finnish companies Stora Enso and Nokian Renkaat, the shares of which rose by 9% and 5%, respectively, on the Helsinki Stock Exchange.

No changes took place in the bond portfolio last month. It was once again a poorer month on the markets when all of the main segments ended the month in negative territory, with the greatest disappointment coming from the highest rated Germany securities. To the extent that the fund’s investments have a rather low interest risk, this helped protect the portfolio against a decline in price.

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

See more at Pensionikeskus.ee

Resale of shares

Fund shares can always be sold, in which case income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The third pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

LHV Pension Fund Indeks Pluss
  • High risk level.
  • Suitable for investors with a high risk tolerance, who are prepared to tolerate the risks arising from potentially significant fluctuations in equity markets. Investing in the fund assumes previous investment experience.
Buy units

Strategy
The fund invests all of its assets in equity markets and the fund manager does not actively change the fund’s risk level. The fund’s assets are invested in index-following investment funds. The share of funds investing in equities is kept close to 100% of the fund’s volume. Whenever the share of money exceeds 2% of the fund’s volume, the free money is invested at least in the amount exceeding 2%, within five banking days.

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,39%.

Information about the fund

Volume of the fund (as of 31.10.2017)1,173,457.37 €

Price of a unit

Management companyLHV Varahaldus

AS SEB Pank

We invest the assets of the fund in index-following investment funds. We keep the share of funds investing in equities close to 100% of the fund’s volume. Whenever the share of money exceeds 2% of the fund’s volume, we invest the free money, at least in the amount exceeding 2%, within five banking days.

No particular indices are followed in investing the assets of the fund. Investments in investment funds investing in equities are distributed between three types of markets – developed markets, emerging markets and frontier markets – based on their approximate share in global gross domestic product (GDP).

The data is presented as at 31.10.2017.

Biggest investments
db x-trackers MSCI World Index UCITS ETF9.65%
Vanguard Total World Stock ETF9.52%
iShares Edge MSCI Min Vol Global ETF9.07%
Vanguard FTSE Emerging Markets ETF8.82%
iShares Core MSCI World UCITS8.81%
iShares Core MSCI Emerging Markets ETF8.17%
Schwab Emerging Markets Equity ETF7.06%
Vanguard FTSE All-World UCITS ETF6.63%
Vanguard FTSE Emerging Markets UCITS ETF5.66%
Powershares QQQ Trust Series 13.90%
Current asset allocation
Money and deposits0.7%
Shares99.3%
Regional distribution
Money and deposits0.7%
Emerging Markets31.9%
Frontier Markets3.5%
Developed Markets63.9%

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

See more at Pensionikeskus.ee

Resale of shares

Fund shares can always be sold, in which case income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The third pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

The third pillar is flexible and easy to start

1.

Open a securities account
You need to have a securities account at the Estonian Central Register of Securities to invest in the third pillar.

2.

Add money to your account
Add money to your account to buy units of the third pillar.

3.

Make a standing payment order
You can see your third pillar units in your third pillar statement within two banking days.

Market overview of pension funds

Two new investments to domestic market
Andres Viisemann, Head of LHV Pension Funds

After the summer break, the stock markets continued their growth trend in September. The stock market indices of the USA as well as Germany achieved their highest levels in history at the end of the month, reaching respectively 2,519 and 12,809 points.

Benefits of III pillar

Hele Kõrve

LHV pensionikoguja

“Kokkuvõtlikult on pensioni valimisel kolm asja olulised – fondi tootlus, risk ja sinu enda vanus. Mina olen 36-aastane ja soovin koguda pensionifondi, millel on võimalikult kõrge pikaajaline tootlus. Tootlus mõjutab pensionivara suurust.“

Ask for advice

Do not hesitate to ask, together we will find a suitable solution.

Reet Roos
Pension Consultant
Mon–Fri 8–17
680 2743
Sign up for a consultation