etru

II pillar

LHV pension funds have the highest 10-year rate of return¹

As retirement age approaches, the pension fund should involve lower risk. When choosing your second pension pillar, keep in mind two important things:

  • how much time you have left until retirement
  • what level of risk you are willing to take
Join the II pension pillar

View the current state of your pension

II pillar funds

LHV Pension Fund XS – The safest choice

Suitable if

  • you have less than 3 years left until retirement,
  • you have low risk tolerance,
  • your aim is to preserve your savings and avoid losses.
Join the fund

Strategy
We invest the money into the bonds of various governments and their affiliated organisations. They offer the greatest stability and the lowest risks. There is no stock market risk. The money accumulated for your pension remains stable.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,62802%

Information about the fund

Volume of the fund (as of 31.03.2017)20,629,166.38 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund200 000 units

Depositary where the fund’s assets are heldSwedbank

Where do we invest?

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 31.03.2017

Biggest investments
Czech Republic 05/20224.73%
Temasek Financial 03/20224.25%
Lithuania 09/20173.97%
Slovakia 11/20243.92%
Elering 07/20183.88%
Amber Circle Funding 12/20223.01%
Latvenergo 05/20202.21%
Latvenergo 06/20222.02%
Lithuania 01/20241.91%
Romania 10/20241.89%
Current asset allocation
Money and deposits57.4%
Government bonds21.5%
Corporate bonds21.1%
Regional distribution
Money and deposits57.4%
The Baltic states17.6%
Europe (excl. the Baltic states)13.2%
Asia7.3%
Other4.5%
Fund’s fortunes

European bond market was volatile in March

Romet Enok, Portfolio Manager

As the most important bond markets of European governments, Germany, France and Italy were slightly in the negative in March, as in the middle of the month they had displayed a rather steep decline. The last week of the month was more positive. The price hike was reinforced by the growing uncertainty related to the upcoming elections in France and the resulting increased interest in bonds among investors. The large share of cash and deposits helped the fund maintain the month’s losses at -0.2%, which is close to a half of the decline of the German market.

Bond markets are still lacking a clear direction. Prices move along the established corridor depending on whether the focus of attention is on the improving economic figures or fears resulting from political events. The fund did not acquire new positions or sell any of the present ones.

Disbursements

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

Pension agreement: when more than 50 times the national pension rate has been accumulated

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension until the end of your life. This is important information, as insurance companies are making estimations about the duration of the pension age and calculate the sum of the disbursements made to you. If you live a healthy life and to an old age, the insurance company will make payments to you in a larger amount than the one accumulated in the fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. Heirs are free to choose whether to withdraw the amount at once or to inherit fund shares. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund S – A safe choice

Suitable if

  • you have less than 3 years left until retirement,
  • you have low risk tolerance,
  • your aim is the preservation and modest growth of your pension savings.
Join the fund

Strategy
We invest your money into strong corporate bonds. They offer stability in the maintenance of your money and are not affected as much by the prevalent economic situation as corporate shares. There is no stock market risk. The growth of your pension savings is limited, but will be stable.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,79800%

Information about the fund

Volume of the fund (as of 31.03.2017)60,737,350.12 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund500 000 units

Depositary where the fund’s assets are heldSwedbank

Where do we invest?

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 31.03.2017

Biggest investments
Latvia 09/20256.25%
Temasek Financial 03/20224.37%
Latvenergo 06/20224.35%
Lithuania 01/20244.31%
Slovakia 11/20244.21%
Investor 05/20233.26%
Amber Circle Funding 12/20222.96%
Romania 10/20242.66%
UniCredit Bank 10/20202.65%
Sanofi 09/20202.63%
Current asset allocation
Money and deposits30.6%
Government bonds27.1%
Corporate bonds42.3%
Regional distribution
Money and deposits30.6%
The Baltic states22.4%
Europe (excl. the Baltic states)29.4%
Asia7.3%
North America5.0%
Other5.4%
Fund’s fortunes

Volatile time on the corporate bonds market does not favour the acquiring of new positions

Romet Enok, Portfolio Manager

While in March the corporate bond market was more stable in its price fluctuations, it still did not manage to offer a positive rate of return. The overall worsening of the interest environment in the second half of the month due to fears preceding the French elections did not make up for the decline in prices in the first weeks.

The European bond market is still open to companies. This means that the involvement of funds is also possible in very large volumes, but anxiety about the very high price level can also be seen. Mainly due to this anxious volatility, we did not bring new positions to the fund in March.

Disbursements

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

Pension agreement: when more than 50 times the national pension rate has been accumulated

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension until the end of your life. This is important information, as insurance companies are making estimations about the duration of the pension age and calculate the sum of the disbursements made to you. If you live a healthy life and to an old age, the insurance company will make payments to you in a larger amount than the one accumulated in the fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. Heirs are free to choose whether to withdraw the amount at once or to inherit fund shares. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund M - A balanced choice

Suitable if

  • you have more than 3–10 years left until retirement age,
  • you have moderate risk tolerance
  • the aim is the long-term stable growth of your pension savings.
Join the fund

Strategy
We allocate most of the funds into bonds, which offer stability when it comes to the preservation of your money. For added balance, we also invest into real estate and enterprises to allow for stable growth by your pension savings. Up to 25% of the fund’s assets will be allocated to shares, that is, holdings in companies will be acquired. We invest the rest into bonds and real estate.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1,06400%

Information about the fund

Volume of the fund (as of 31.03.2017)70,393,223.58 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund580 000 units

Depositary where the fund’s assets are heldSwedbank

Where do we invest?

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 31.03.2017

Biggest investments
EfTEN Kinnisvarafond5.50%
Latvia 09/20254.35%
Latvia 01/20214.30%
Bulgaria 09/20243.34%
East Capital Baltic Property Fund II3.29%
Latvenergo 06/20223.26%
Amber Circle Funding 12/20222.93%
Citadele banka 12/20262.53%
JP Morgan Chase 08/20212.38%
Wells Fargo & Company 07/20212.36%
Current asset allocation
Money and deposits37.7%
Government bonds21.3%
Corporate bonds23.9%
Real estate10.0%
Shares7.1%
Regional distribution
Money and deposits37.7%
The Baltic states39.4%
Europe (excl. the Baltic states)12.5%
Asia3.3%
North America4.9%
Other2.2%
Fund’s fortunes

European stock market trudged on towards the positive and the bond market declined slightly

Romet Enok, Portfolio Manager

Supported by the recovering economic growth and inflation, March ended up as favourable for the European stock markets. Out of the Baltic stock markets, Riga was the strongest, where the stock market index increased by 4%, while the Japanese stock market index declined by 1% when measured in the local currency. The rate of return of the Pension Fund M was also impacted positively by its investment into the European healthcare sector.

Among the private equity funds in the portfolio of Pension Fund L, subsequent new investments were made by Livonia Partners as well as BaltCap II funds. Livonia acquired a holding in the leading Baltic IT company Santa Monica Networks and BaltCap bought the Baltic business of Selecta, a producer of automated coffee machines.

Both the corporate as well as government bonds market declined slightly in the past month, but still recovered from the rather notable decline of the middle of the month in the course of the last week. Bond markets are currently lacking clear direction: the macroeconomy and political events are fighting for investors’ attention.

There were more events on the level of the fund’s single investments. After a longer analysis process, LHV’s pension funds came to an agreement for the financing of the purchase of the portal Auto24. This purchase by the company’s management and private capital investors is financed by the funds through two bonds: one with an interest rate of 3% as an alternative to a bank loan and another with a rate of 12% as an alternative to equity.

During the same period the fund passed over a position in Nokia’s bond, as the issuer expressed their wish to repurchase their obligations themselves. An unpleasant surprise was the decline of the bonds of Brasil Foods due to the scandal that erupted on the topic of hygiene problems in the Brazilian meat industry. Due to this, the company’s bond fell 7%, but also managed to make up for half of it by the end of the month.

Disbursements

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

Pension agreement: when more than 50 times the national pension rate has been accumulated

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension until the end of your life. This is important information, as insurance companies are making estimations about the duration of the pension age and calculate the sum of the disbursements made to you. If you live a healthy life and to an old age, the insurance company will make payments to you in a larger amount than the one accumulated in the fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. Heirs are free to choose whether to withdraw the amount at once or to inherit fund shares. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund L – LHV’s flagship

Suitable if

  • you have more than 10 years left until retirement,
  • you have average risk tolerance
  • the aim is the long-term growth of your pension savings.
Join the fund

Strategy
We invest in different areas, the development of which we believe in (e.g. real estate, forest, private equity, Baltic shares, international stock markets and bonds). We allocate up to 50% of the fund’s assets onto stock markets, obtaining holdings in companies. We invest the rest into bonds and real estate.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1,33000%

Information about the fund

Volume of the fund (as of 31.03.2017)472,388,702.35 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund3 000 000 units

Depositary where the fund’s assets are heldSwedbank

Where do we invest?

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 31.03.2017

Biggest investments
EfTEN Kinnisvarafond5.47%
Latvia 01/20215.11%
Latvia 09/20254.38%
Bulgaria 09/20243.37%
Lithuania 01/20243.07%
East Capital Baltic Property Fund II2.73%
Amber Circle Funding 12/20222.60%
JP Morgan Chase 08/20212.36%
Wells Fargo & Company 07/20212.34%
WisdomTree Japan Hedged Equity Fund1.85%
Current asset allocation
Money and deposits30.0%
Government bonds23.2%
Corporate bonds19.7%
Real estate9.9%
Shares17.3%
Regional distribution
Money and deposits30.0%
The Baltic states42.6%
Europe (excl. the Baltic states)14.4%
Asia5.1%
North America5.2%
Other2.8%
Fund’s fortunes

European stock market trudged on towards the positive and the bond market declined slightly

Kristo Oidermaa, Portfolio Manager

On the background of the recovering economic growth and inflation, March ended up as positive for the global stock markets. Solid yields were displayed mainly by the European stock markets led by Italy, Spain, France and Germany. A good result was also achieved by the Baltic stock market indexes, of which Riga was the strongest with an increase of 4%. The Japanese stock market, on the other hand, fell by 1% measured in the local currency. Of the sectors, the pension fund’s yield was supported by investments into the European healthcare and automotive industries.

Of the private capital funds in the portfolio of Pension Fund L, Livonia Partners made their third investment, acquiring a holding in Santa Monica Networks, a leading Baltic IT company. The private capital fund BaltCap II acquired the Baltic business of Selecta, an automated coffee machine maker.

Both the corporate as well as government bonds market declined slightly in the past month, but still recovered from the rather notable decline of the middle of the month in the course of the last week. Bond markets are currently lacking clear direction: the macroeconomy and political events are fighting for investors’ attention.

There were more events on the level of the fund’s single investments. After a longer analysis process, LHV’s pension funds came to an agreement for the financing of the purchase of the portal Auto24. This purchase by the company’s management and private capital investors is financed by the funds through two bonds: one with an interest rate of 3% as an alternative to a bank loan and another with a rate of 12% as an alternative to equity.

During the same period the fund passed over a position in Nokia’s bond, as the issuer expressed their wish to repurchase their obligations themselves. An unpleasant surprise was the decline of the bonds of Brasil Foods due to the scandal that erupted on the topic of hygiene problems in the Brazilian meat industry. Due to this, the company’s bond fell 7%, but also managed to make up for half of it by the end of the month.

Disbursements

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

Pension agreement: when more than 50 times the national pension rate has been accumulated

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension until the end of your life. This is important information, as insurance companies are making estimations about the duration of the pension age and calculate the sum of the disbursements made to you. If you live a healthy life and to an old age, the insurance company will make payments to you in a larger amount than the one accumulated in the fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. Heirs are free to choose whether to withdraw the amount at once or to inherit fund shares. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund XL - The boldest choice

Suitable if

  • you have more than 15 years left until retirement,
  • you are prepared to take above-average risks,
  • your aim is the long-term growth of your pension savings.
Join the fund

Strategy
We allocate up to 75% of the fund’s assets into shares, i.e. obtaining holdings in companies. We invest the rest into bonds and real estate. In 2012, we changed our investment strategy; until then, up to 50% was invested into shares.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1,33000%

Information about the fund

Volume of the fund (as of 31.03.2017)118,650,390.76 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund900 000 units

Depositary where the fund’s assets are heldSwedbank

Where do we invest?

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 31.03.2017

Biggest investments
EfTEN Kinnisvarafond5.46%
East Capital Baltic Property Fund II4.39%
Latvia 09/20253.29%
Bulgaria 09/20243,.4%
Amber Circle Funding 12/20222.94%
WisdomTree Japan Hedged Equity Fund2.82%
iShares STOXX Europe 600 Health Care2.70%
JP Morgan Chase 08/20212.34%
Wells Fargo & Company 07/20212.32%
BRF 06/20221.77%
Current asset allocation
Money and deposits35.5%
Government bonds11.1%
Corporate bonds17,9%
Real estate12.5%
Shares23.0%
Regional distribution
Money and deposits35.5%
The Baltic states35,2%
Europe (excl. the Baltic states)14.7%
Asia6.6%
North America4.8%
Other3.2%
Fund’s fortunes

A strong month for the European and Baltic stock markets

Kristo Oidermaa, Portfolio Manager

On the background of the recovering inflation, March ended up as positive for the global stock markets. Strong results were achieved mainly by the European stock markets led by Italy, Spain, France and Germany. Good yields were also displayed by the Baltic stock markets, with Riga stock market index the strongest with its 4% increase. The yield of Pension Fund XL was supported in March by investments into the European healthcare and automotive industries. Investment in the Japanese stock market, on the other hand, had a negative impact as its stock market index fell by 1% measured in the local currency.

Among the private equity funds found in the portfolio of Pension Fund L, subsequent new investments were made by Livonia Partners as well as BaltCap II funds. Livonia acquired a holding in the leading Baltic IT company Santa Monica Networks and BaltCap bought the Baltic business of Selecta, a producer of automated coffee machines.

Both the corporate as well as government bonds market declined slightly in the past month, but still recovered from the rather notable decline of the middle of the month in the course of the last week. Bond markets are currently lacking clear direction: the macroeconomy and political events are fighting for investors’ attention.

There were more events on the level of the fund’s single investments. After a longer analysis process, LHV’s pension funds came to an agreement for the financing of the purchase of the portal Auto24. This purchase by the company’s management and private capital investors is financed by the funds through two bonds: one with an interest rate of 3% as an alternative to a bank loan and another with a rate of 12% as an alternative to equity.

From the negative side, the 7% decrease of the bonds of Brasil Foods due to hygiene problems in the Brazilian food industry must be mentioned. By the end of the month, however, the improving situation had already made up for half of the loss.

Disbursements

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

Pension agreement: when more than 50 times the national pension rate has been accumulated

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension until the end of your life. This is important information, as insurance companies are making estimations about the duration of the pension age and calculate the sum of the disbursements made to you. If you live a healthy life and to an old age, the insurance company will make payments to you in a larger amount than the one accumulated in the fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. Heirs are free to choose whether to withdraw the amount at once or to inherit fund shares. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund Indeks – Continuous investment

Suitable if

  • you want to invest on financial markets on a continuous basis,
  • wish to grow your pension pillar at the lowest possible costs,
  • have prior personal investment experience.
Join the fund

Strategy
We invest broadly in equity and real estate funds. When investing, we prefer funds that are exchange traded (ETF), have a low cost rate, hold physical assets (not synthetic), are cost effective, liquid and follow the base index. Up to 75% of the fund’s assets have been invested in equity funds, the rest in real estate funds. We invest in equity funds both in developed, emerging as well as frontier markets, based on global GDP distribution. Whenever the proportion of money in the fund exceeds 2%, it is invested within five working days.

Rate of return

From the beginning/ Current year/ Current month

Expenses

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

Information about the fund

Volume of the fund (as of 31.03.2017)4,057,875.67 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

Rate of the depositary’s charge0,0924% (paid by LHV)

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

Documents and reports
Where do we invest?

We invest up to 75% of the fund’s assets in equity funds, the rest in real estate funds. We invest in equity funds both in developed, emerging as well as frontier markets, based on global GDP distribution. Whenever the proportion of money in the fund exceeds 2%, it is invested within five working days.

The data is presented as at 31.03.2017

Biggest investments
Vanguard Total World Stock ETF9.62%
iShares Core MSCI World UCITS8.91%
Vanguard FTSE Emerging Markets ETF8.61%
BNP Paribas Easy FTSE EPRA/NAREIT Eurozone Capped8.50%
iShares Global REIT ETF8.18%
SPDR Dow Jones Global Real Estate ETF7.87%
iShares Core MSCI Emerging Markets ETF7.71%
Vanguard FTSE All-World UCITS ETF7.39%
iShares Edge MSCI World Minimum Volatility UCITS E7.25%
db x-trackers MSCI World Index UCITS ETF7.13%
Current asset allocation
Money and deposits0.6%
Real estate27.1%
Shares72.3%
Regional distribution
Money and deposits0.6%
Emerging Markets23.1%
Frontier Markets2.6%
Developed Markets73.8%
Disbursements

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

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Pension agreement: when more than 50 times the national pension rate has been accumulated

The main option of withdrawing the money accumulated in the 2nd pillar fund is to conclude a pension agreement. This means that upon retirement you conclude an agreement with a life insurance company, handing the funds accumulated in the pension fund over to the disposal of the company. In return, the insurance company will pay you a regular pension until the end of your life. This is important information, as insurance companies are making estimations about the duration of the pension age and calculate the sum of the disbursements made to you. If you live a healthy life and to an old age, the insurance company will make payments to you in a larger amount than the one accumulated in the fund. Otherwise, the insurance company keeps some of the money and uses it to make payments to clients who live to an older age.

Funded pension: when up to 50 times the national pension rate has been accumulated

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

In a lump sum: when up to 10 times the national pension rate has been accumulated

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

The assets of the pension fund can be bequeathed. Heirs are free to choose whether to withdraw the amount at once or to inherit fund shares. An income tax of 20% applies to the cash payments.

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

Market overview of pension funds

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Domestic market offers valuable investment opportunities

Andres Viisemann, Head of LHV Pension Funds

March was a relatively calm month on securities markets. Emotions, both positive and negative, related to the US presidential election are beginning to slowly dissipate, and investors are gradually adjusting to the character and moods of the new leader of the world’s most powerful country.

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
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