II pillar

LHV pension funds have the highest 15-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

II pillar funds

LHV Pensionifond 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 0.585%

Information about the fund

Volume of the fund (as of 30.06.2018)20,214,595.72 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund110 000 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS 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 30.06.2018

Biggest investments
France 05/20276.12%
Germany 09/20224.87%
Czech Republic 05/20224.57%
Temasek Financial 03/20224.38%
Transpordi Varahaldus 04/20254.15%
Slovakia 11/20243.96%
Riigi Kinnisvara 06/20273.96%
Elering 07/20183.79%
United States 08/20192.96%
Amber Circle Funding 12/20222.72%
Current asset allocation
Money and deposits28.38%
Government bonds31.32%
Corporate bonds40.29%
Regional distribution
Money and deposits28.38%
The Baltic states28.72%
Europe (excl. the Baltic states)26.47%
Asia9.10%
North America2.96%
Other4.36%

Another solid result among conservative funds

Romet Enok, Fund Manager

The European bond market experienced a strong setback in May, where the elections in Italy, the third strongest economy of the euro zone, resulted in a government coalition that was clearly startling to investors. Consequently the Italian bonds, having displayed good returns since the beginning of the year, driving the European bonds as a whole towards the positive, took a downturn in price that was sometimes faster than during the last crisis in the euro zone. Due to the high price level, LHV’s pension funds have avoided making any investments there. Instead, the fund earnt from the positions held in US dollars, as the dollar took a sharp price increase against the euro. Given all of this, the value of the fund’s assets increased by almost half a percent in a month during this difficult period, meaning that XS has displayed very good results among conservative funds since the beginning of the year.

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 2018 the sum is EUR 189.31.

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 9465 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 1893 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 2018 is EUR 500.

LHV Pensionifond 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 0.684%

Information about the fund

Volume of the fund (as of 30.06.2018)60,485,885.53 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund270 000 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS 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 30.06.2018

Biggest investments
France 10/20225.30%
Temasek Financial 03/20224.44%
Transpordi Varahaldus 04/20254.39%
Latvenergo 06/20224.31%
Riigi Kinnisvara 06/20273.97%
Investor 05/20233.35%
Total Capital Intl 03/20202.99%
Romania 10/20242.74%
Elering 07/20182.70%
Amber Circle Funding 12/20222.63%
Current asset allocation
Money and deposits14.62%
Government bonds20.92%
Corporate bonds64.44%
Regional distribution
Money and deposits14.62%
The Baltic states24.95%
Europe (excl. the Baltic states)40.81%
Asia7.54%
North America6.89%
Other5.17%

Increase in the price of the dollar against the euro had a positive impact on the fund’s outcome

Romet Enok, Fund Manager

The European bond market experienced a strong setback in May, where the elections in Italy, the third strongest economy of the euro zone, resulted in a government coalition that was clearly startling to investors. Consequently the Italian bonds, having displayed good returns since the beginning of the year, driving the European bonds as a whole towards the positive, took a downturn in price that was sometimes faster than during the last crisis in the euro zone. Due to the high price level, LHV’s pension funds have avoided making any investments there. Instead, the fund earnt from the positions held in US dollars, as the dollar took a sharp price increase against the euro. Given the above, in May the fund displayed great returns in the field of bonds, only being surpassed among conservative funds by LHV’s other conservative fund.

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 2018 the sum is EUR 189.31.

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 9465 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 1893 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 2018 is EUR 500.

LHV Pensionifond 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 1.008%

Information about the fund

Volume of the fund (as of 30.06.2018)106,816,580.41 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund380 000 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS 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 30.06.2018

Biggest investments
EfTEN Kinnisvarafond4.16%
Riigi Kinnisvara 06/20273.56%
Transpordi Varahaldus 04/20253.18%
Luminor Bank 12/20193.09%
France 10/20223.09%
Tartu Linnavalitsus 10/20322.60%
Coop Pank 12/20272.15%
Latvenergo 06/20222.12%
auto24 04/20222.08%
Citadele banka 12/20262.05%
Current asset allocation
Money and deposits3.07%
Government bonds12.07%
Corporate bonds67.87%
Real estate8.04%
Shares8.95%
Regional distribution
Money and deposits3.07%
The Baltic states54.81%
Europe (excl. the Baltic states)29.04%
Asia2.66%
North America9.53%
Other0.89%

Global stock markets took different directions in May

Romet Enok, Fund Manager

In May, the global stock markets took different directions. While the US stock markets displayed a positive rate of return during the month, the stock markets of several European countries and developing countries were in decline. The Helsinki stock market index however continued its upward trend, increasing by 1.1% in May. In the Baltic states, the Riga stock market, which increased by 1.8%, was the strongest. The Vilnius stock market had a rate of return of 0.9%, but the Tallinn stock market declined by 1.6%. Several Baltic public companies reported their results for Q1 in May, which showed great variations between the outcomes of companies. For example, the sales of the Lithuanian clothing retailer Apranga decreased by 5% when compared to Q1 last year, and the company’s profitability was also significantly lower. However, the lingerie manufacturer Silvano Fashion Group managed to increase their sales revenue by 11% during the year, with a whole 27% on the Russian market. The company’s margins and profitability also improved. Due to the weak results, the share of Apranga declined by 8.6% during the month, but Silvano’s share increased by 2.2%.

May was a very complicated month on the bond markets, as the new Italian government resulted in a steep decline in the country’s bonds which, in its lowest points, reached more than 8% when compared to the beginning of the month. Mainly due to the high prices, we have avoided government bonds of the euro zone in our funds, focusing on the floating-interest bonds of highly rated companies or local bonds. Due to this, the fund does not have any positions in the bonds of Italian issuers. Instead, we purchased the floating-interest bonds of the world’s biggest insurance groups Berkshire Hathaway and Allianz and the French real estate enterprise Gecina. Also, a transaction was finalised where the Baltic Horizon Fund, a real estate fund listed on the Tallinn stock market, issued five-year bonds with an interest rate of 4.25%. As the troubles with the Italian government bonds did not have an impact on the European corporate bond market where the fund has invested more, and the exchange rate for the dollar against the euro increased steeply, the bond portfolio made a positive contribution to the fund’s returns during a very hard month for the market.

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 2018 the sum is EUR 189.31.

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 9465 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 1893 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 2018 is EUR 500.

LHV Pensionifond 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 1.260%

Information about the fund

Volume of the fund (as of 30.06.2018)784,488,952.40 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 400 000 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS 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 30.06.2018

Biggest investments
EfTEN Kinnisvarafond4.89%
Riigi Kinnisvara 06/20273.96%
France 10/20223.33%
Luminor Bank 12/20193.28%
Latvia 01/20213.01%
JP Morgan Chase 08/20212.31%
Wells Fargo & Company 07/20212.29%
Lithuania 01/20242.14%
Siauliu Bankas 12/20202.05%
East Capital Baltic Property Fund III1.75%
Current asset allocation
Money and deposits2.49%
Government bonds15.73%
Corporate bonds51.29%
Real estate10.10%
Shares20.41%
Regional distribution
Money and deposits2.49%
The Baltic states53.72%
Europe (excl. the Baltic states)27.95%
Asia5.51%
North America9.40%
Other0.95%

The Riga stock market was the strongest in the Baltic states in May

Kristo Oidermaa, Fund Manager

In May, the global stock markets took different directions. While the US stock markets displayed a positive rate of return during the month, the stock markets of several European countries and developing countries were in decline. The Helsinki stock market index however continued its upward trend, increasing by 1.1% in May. Measured in the local currency, the Japanese stock market declined by 1.2%, but owing to the changes in the exchange rate, in euros the rate of return was established at +2.9%. In the Baltic states, the Riga stock market, which increased by 1.8%, was the strongest. The Vilnius stock market had a rate of return of 0.9%, but the Tallinn stock market declined by 1.6%. Several Baltic publicly traded companies reported their results for Q1 in May, among them the Lithuanian travel agent Novaturas, one of the pension fund’s latest stock market investments. Corporate profits grew 49% year-on-year and services were provided to a record number of travellers. Regardless of the one-off expenses related to the IPO the company also managed to raise their profitability. The share of Novaturas also reacted positively to the outcome and grew 5.7% in the month.

May was a very complicated month on the bond markets, as the new Italian government resulted in a steep decline in the country’s bonds which, in its lowest points, reached more than 8% when compared to the beginning of the month. Mainly due to the high prices, we have avoided government bonds of the euro zone in our funds, focusing on the floating-interest bonds of highly rated companies or local bonds. Due to this, the fund does not have any positions in the bonds of Italian issuers. Instead, we purchased the floating-interest bonds of the world’s biggest insurance groups Berkshire Hathaway and Allianz and the French real estate enterprise Gecina. Also, a transaction was finalised where the Baltic Horizon Fund, a real estate fund listed on the Tallinn stock market, issued five-year bonds with an interest rate of 4.25%. As the troubles with the Italian government bonds did not have an impact on the European corporate bond market where the fund has invested more, and the exchange rate for the dollar against the euro increased steeply, the bond portfolio made a positive contribution to the fund’s returns during a very hard month for the market.

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 2018 the sum is EUR 189.31.

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 9465 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 1893 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 2018 is EUR 500.

LHV Pensionifond 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 1.260%

Information about the fund

Volume of the fund (as of 30.06.2018)153,497,328.58 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund500 000 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS 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 30.06.2018

Biggest investments
EfTEN Kinnisvarafond4.15%
Luminor Bank 12/20193.92%
Riigi Kinnisvara 06/20273.45%
East Capital Baltic Property Fund II2.61%
East Capital Baltic Property Fund III2.46%
France 10/20222.19%
WisdomTree Japan Hedged Equity Fund2.13%
Amber Circle Funding 12/20222.01%
JP Morgan Chase 08/20212.00%
iShares STOXX Europe 600 Health Care1.98%
Current asset allocation
Money and deposits2.10%
Government bonds6.86%
Corporate bonds55.05%
Real estate12.72%
Shares23.27%
Regional distribution
Money and deposits2.10%
The Baltic states47.49%
Europe (excl. the Baltic states)33.26%
Asia6.44%
North America9.19%
Other1.52%

Dollar gaining strength against the euro and investments into the German Siemens have a positive impact

Kristo Oidermaa, Fund Manager

In May, the global stock markets took different directions. While the US stock markets displayed a positive rate of return during the month, the stock markets of several European countries and developing countries were in decline. Against the background of political troubles, the Italian and Spanish stock market indices showed a weak result, declining by 9.2% and 5.2%, respectively. The Helsinki stock market index however continued its upward trend, increasing by 1.1% in May. Measured in the local currency, the Japanese stock market declined by 1.2%, but owing to the changes in the exchange rate, when measured in euros the rate of return was established at +2.9%. In the Baltic states, the Riga stock market which increased by 1.8% was the strongest. The Vilnius stock market had a rate of return of 0.9%, but the Tallinn stock market declined by 1.6%. The pension fund’s rate of return benefited from the investment to the German industrial enterprise Siemens, which reported strong quarterly results and increased the profit expectations. The company’s share increased by almost 7% during the month. However, the German car manufacturer Daimler brought along a negative result, with its share declining by 4.9% due to the fear of the US establishing customs tariffs.

May was a very complicated month on the bond markets, as the new Italian government resulted in a steep decline in the country’s bonds which, in its lowest points, reached more than 8% when compared to the beginning of the month. Mainly due to the high prices, we have avoided government bonds of the euro zone in our funds, focusing on the floating-interest bonds of highly rated companies or local bonds. Due to this, the fund does not have any positions in the bonds of Italian issuers. Instead, we purchased the floating-interest bonds of the world’s biggest insurance groups Berkshire Hathaway and Allianz and the French real estate enterprise Gecina and the German real estate enterprise Vonovia. Also, a transaction was finalised where the Baltic Horizon Fund, a real estate fund listed on the Tallinn stock market, issued five-year bonds with an interest rate of 4.25%. As the troubles with the Italian government bonds did not have an impact on the European corporate bond market where the fund has invested more, and the exchange rate for the dollar against the euro increased steeply, the bond portfolio made a positive contribution to the fund’s returns during a very hard month for the market.

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 2018 the sum is EUR 189.31.

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 9465 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 1893 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 2018 is EUR 500.

LHV Pensionifond 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 30.06.2018)10,306,666.88 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS SEB Pank

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 30.06.2018

Biggest investments
Amundi Index FTSE EPRA Nareit Global UCITS ETF15.18%
iShares Core MSCI World UCITS13.63%
db x-trackers MSCI Emerging Markets Index UCITS10.66%
iShares Global REIT ETF6.62%
db x-trackers MSCI World Index UCITS ETF5.72%
Vanguard Total World Stock ETF5.50%
BNP Paribas Easy FTSE EPRA/NAREIT Eurozone Capped5.35%
Vanguard FTSE All-World UCITS ETF5.23%
db x-trackers MSCI USA Index UCITS ETF5.17%
iShares Core MSCI Emerging Markets ETF5.03%
Current asset allocation
Money and deposits0.52%
Real estate27.75%
Shares71.77%
Regional distribution
Money and deposits0.52%
Emerging Markets23.15%
Frontier Markets2.23%
Developed Markets74.14%

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 2018 the sum is EUR 189.31.

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 9465 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 1893 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 2018 is EUR 500.

LHV Pensionifond Eesti – maximum investment in Estonia

Suitable if

  • you have more than 15 years left until retirement,
  • you want to link your pension with the Estonian economy,
  • you also have investments in other regions.
Join the fund
Strategy

The fund invests, subject to the availability of suitable investments, 100% in Estonia. Investments are made in shares, debts, real estate, and also in other funds. Since the number of securities traded on the Tallinn Stock Exchange is low, the fund invests extensively outside the exchange. Since the fund is linked to one region, it would not be wise to invest all your pension assets in this fund.

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1.26%

Information about the fund

Volume of the fund (as of 30.06.2018)1,860,742.15 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 343 750 units

Rate of the depository’s charge0,06% (paid by LHV)

DepositoryAS SEB Pank

The assets of LHV Pensionifond Eesti are invested mostly in Estonia – the country in whose development we have faith and whose potential we know the best. The results of the fund are directly dependent on the well-being of the Estonian economy and Estonian companies. Due to a scarcity of suitable investments, the share of each investment is relatively high.

The data is presented as at 30.06.2018

Biggest investments
Birdeye Timber Fund5.87%
Eesti Energia 09/20235.83%
auto24 04/20225.53%
EfTEN Kinnisvarafond II5.48%
Allianz Finance 12/20205.43%
Baltic Horizon Fund 05/20235.41%
Daimler Intl Finance 05/20225.35%
Tallinna Kaubamaja4.45%
Tallink Grupp4.14%
BMW 09/20202.85%
Current asset allocation
Money and deposits30.95%
Corporate bonds35.80%
Real estate13.36%
Shares19.91%
Regional distribution
Money and deposits30.95%
The Baltic states50.04%
Europe (excl. the Baltic states)19.03%

The fund bought the bonds of the Baltic Horizon Fund and prepared for the IPO of Tallinna Sadam

Kristo Oidermaa, Romet Enok, Fund Managers

In May, the official announcement was made that a minority holding in Tallinna Sadam, until then an entirely state-owned enterprise, would be publicly listed. The company issued more than 75 million new shares and the state sold more than 11 million shares to the investor, as a result of which new investors own 33% of Tallinna Sadam and the state’s holding decreased to 67%. The main selling points to the investors are stable and substantial dividend payments and moderate expectations for the growth of revenues and profits. In the years 2019–2020 Tallinna Sadam has promised to pay at least 30 million euros to shareholders as dividends which, at the given share price, means that the dividend yield is 6–8%.

In the bond portfolio, a transaction was finalised where the Baltic Horizon Fund, a real estate fund listed on the Tallinn stock market, issued five-year bonds with an interest rate of 4.25%. The company has the right to redeem the bonds prematurely by paying a premium to the investors.

Market overview of pension funds

We keep risk levels low for LHV fund portfolios
Andres Viisemann, Head of LHV Pension Funds

The markets were once again somewhat more on edge in May. A small shock hit the European bond market. The interest rates on Italian bonds and the bonds of other southern European countries rose, due to investor shock at the composition of the recently assembled coalition government. At the same time, the yields on the bonds of Germany and other European countries with a more conservative fiscal policy decreased (the prices of the bonds rose), since demand for very low risk bonds grew.

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