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 31.05.2017)20,592,249.08 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund110 000 units

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

Depositary where the fund’s assets are heldAS 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 31.05.2017

Biggest investments
Czech Republic 05/20224.59%
Temasek Financial 03/20224.27%
Lithuania 09/20173.98%
Slovakia 11/20243.94%
Elering 07/20183.88%
Amber Circle Funding 12/20222.92%
Latvenergo 05/20202.17%
Latvenergo 06/20222.03%
Romania 10/20241.93%
Lithuania 01/20241.92%
Current asset allocation
Money and deposits57.6%
Government bonds21.4%
Corporate bonds21.0%
Regional distribution
Money and deposits57.6%
The Baltic states17.6%
Europe (excl. the Baltic states)13.2%
Asia7.2%
Other4.5%

Bonds of Eurozone countries showed good results

Romet Enok, portfellihaldur

Interest rates in May continued to move within the narrow range that has developed since the beginning of the year, and if the movement were to be measured with German ten-year bonds, the level towards the end of the month was approximately the same as at the beginning. In relation to the presidential election, France once again managed to post good results, which, due to its large proportion, carried the monthly bond market results of the whole Eurozone government to a solid plus side together with Italy. The main positions of the fund in the bonds of the Eastern Europe governments moved similarly to the Western Europe bonds, as opposed to which, the fall in the dollar against the euro affected the monthly result.

The centre of attention of the fund is still on the creation of over-the-counter (OTC) investment opportunities, during which we reached an agreement to finance the investment plans of Riigi Kinnisvara AS towards the end of May. The conditions of the bonds have been compiled based on the status and size of RKAS and on the conditions characteristic to a large undertaking. Even though the undertaking does not currently hold an international credit rating, the exception arising from the status of the public undertaking allows for the purchasing of a position in the conservative pension fund.

This is the second Estonian public undertaking that the pension fund XS has invested in during the spring — in April, we acquired the bonds of Transpordi Varahaldus OÜ.

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 31.05.2017)63,968,589.06 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund270 000 units

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

Depositary where the fund’s assets are heldAS 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 31.05.2017

Biggest investments
Latvia 09/20255.98%
Temasek Financial 03/20224.17%
Latvenergo 06/20224.14%
Lithuania 01/20244.10%
Slovakia 11/20244.01%
Investor 05/20233.28%
Amber Circle Funding 12/20222.71%
Elering 07/20182.67%
Romania 10/20242.57%
UniCredit Bank 10/20202.53%
Current asset allocation
Money and deposits29.3%
Government bonds27.5%
Corporate bonds43.3%
Regional distribution
Money and deposits29.3%
The Baltic states22.8%
Europe (excl. the Baltic states)29.9%
Asia7.4%
North America5.6%
Other5.1%

Bonds of Eurozone countries showed good results

Romet Enok, Portfolio Manager

May was a calm month on the European bond markets. Even though the rate of return of risk-free instruments remained near zero, most of the other important government bond markets and the bonds of undertakings managed to show a moderate rate of return.

The fund did not acquire new positions from the markets, continuing to focus on the search for and creation of new OTC instruments. During the course of the latter, we reached an agreement at the end of May to finance the investment plans of Riigi Kinnisvara AS. The conditions of the bonds have been compiled based on the status and size of RKAS and on the conditions characteristic to a large undertaking. Even though the undertaking does not currently hold an international credit rating, the exception arising from the status of the public undertaking allows for the purchasing of a position in the conservative pension fund.

This is the second Estonian public undertaking that the pension fund S has invested in during the spring — in April, we acquired the bonds of Transpordi Varahaldus OÜ.

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 31.05.2017)86,007,885.60 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund380 000 units

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

Depositary where the fund’s assets are heldAS 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 31.05.2017

Biggest investments
EfTEN Kinnisvarafond5.12%
Latvia 09/20253.58%
Latvia 01/20213.52%
Bulgaria 09/20243.41%
Autolist 04/20222.88%
East Capital Baltic Property Fund II2.76%
Latvenergo 06/20222.67%
Citadele banka 12/20262.51%
Amber Circle Funding 12/20222.32%
Lithuania 11/20242.29%
Current asset allocation
Money and deposits27.9%
Government bonds20.1%
Corporate bonds35.2%
Real estate9.0%
Shares7.7%
Regional distribution
Money and deposits27.9%
The Baltic states41.4%
Europe (excl. the Baltic states)15.0%
Asia3.0%
North America9.6%
Other1.8%

The fund made its third capacious investment in of the year in the direction of Estonia

Romet Enok, Portfolio Manager

May was a relatively calm period on the global stock markets, and the bonds of European countries ended the month with a predominantly positive rate of return. In the Baltic States, the Tallinn Stock Exchange remained the most modest, which fell by 0.7%. The Riga Stock Exchange exhibited strong growth in the amount of 4.5%, while the share index rose by 2.1%. The Latvian pharmaceutical company Grindeks increased their return on sales during the first quarter by 53% in comparison with the first quarter of last year and multiplied their profits. Due to this, the share price of Grindeks increased more than 11% following the publication of quarterly results. Finnish real estate company Technopolis also reported strong quarterly results, with share increasing by 8% during the month.

On the European bond markets all of the main market segments remained on the plus side in May, although, a bit surprisingly, the best results were achieved by government bonds and the bonds of companies with the lowest credit ratings. When measured from the beginning of the year, risk-free interest is moving within a remarkably narrow corridor, without a clear trend. In this type of environment, we will continue to focus on OTC instruments in our search for new investment objects. In our search for such investments and the creation of instruments, we reached an agreement towards the end of May to finance the investment plans of Riigi Kinnisvara AS. The conditions of the bonds have been compiled based on the status and size of RKAS and on the conditions characteristic to a large undertaking. This is the third Estonian bond into which the pension funds of LHV have invested during the spring—previously, the funds that received financing were the redemption of the Auto24 portal and Transpordi Varahaldus OÜ. Work on analysing local projects and finding new issuers is happening now, and we also hope to find further upgrades to our current portfolio.

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 31.05.2017)697 197 928,66 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 400 000 units

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

Depositary where the fund’s assets are heldAS 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 31.05.2017

Biggest investments
EfTEN Kinnisvarafond5.45%
Latvia 01/20213.46%
Bulgaria 09/20242.99%
Latvia 09/20252.99%
Lithuania 11/20242.54%
JP Morgan Chase 08/20212.28%
Wells Fargo & Company 07/20212.27%
Lithuania 01/20242.09%
Goldman Sachs 12/20181.95%
Bank of America 01/20191.91%
Current asset allocation
Money and deposits24.0%
Government bonds19.9%
Corporate bonds29.4%
Real estate8.7%
Shares18.1%
Regional distribution
Money and deposits24.0%
The Baltic states38.9%
Europe (excl. the Baltic states)19.5%
Asia4.3%
North America10.2%
Other1.9%

The fund continues to invest into Estonian OTC undertakings

Kristo Oidermaa, Portfolio Manager

May was a relatively calm month on the stock markets and the vast majority of stock markets in European countries showed a positive rate of return during the month. When measured in the local currency, the Tokyo Stock Exchange index increased by 2.4% in May. Riga was the strongest amongst the Baltic stock exchanges, growing by 4.5%. The stock market in Vilnius also showed a great rate of return with an increase of 2.1%, but the Tallinn Stock Exchange index fell by 0.7% during the month. The rate of return of the pension fund was supported by Latvian pharmaceutical company Grindeks, which reported strong results in the first quarter. The return on sales of the undertaking increased by 53% compared to the previous year and their profit multiplied. The share price of Grindeks increased by more than 11% after the publication of the results. The Finnish real estate business Technopolis and Japanese e-store Rakuten both reported strong quarterly results, with the share prices of the undertakings increased by 8% and 20%, respectively.

All of the main market segments remained on the plus side on the European bond markets in May, although, a bit surprisingly, the best results were achieved by government bonds and the bonds of companies with the lowest credit ratings. When measured from the beginning of the year, risk-free interest is moving within a remarkably narrow corridor, without a clear trend. In this type of environment, we will continue to focus on OTC instruments in our search for new investment objects. In the search for such investments and the creation of instruments, we reached an agreement towards the end of May to finance the investment plans of Riigi Kinnisvara AS. The conditions of the bonds have been compiled based on the status and size of RKAS and on the conditions characteristic to a large undertaking. This is the third Estonian bond into which the pension funds of LHV have invested during the spring—previously, the funds that received financing were the redemption of the Auto24 portal and Transpordi Varahaldus OÜ. Work on analysing local projects and finding new issuers is happening now, and we also hope to find further upgrades to our current portfolio.

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 31.05.2017)119,748,194.73 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund500 000 units

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

Depositary where the fund’s assets are heldAS 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 31.05.2017

Biggest investments
EfTEN Kinnisvarafond5.26%
East Capital Baltic Property Fund II4.46%
Latvia 09/20253.28%
Bulgaria 09/20243.23%
Amber Circle Funding 12/20222.81%
iShares STOXX Europe 600 Health Care2.79%
WisdomTree Japan Hedged Equity Fund2.68%
JP Morgan Chase 08/20212.23%
Wells Fargo & Company 07/20212.22%
Goldman Sachs 12/20181.94%
Current asset allocation
Money and deposits28.4%
Government bonds11.0%
Corporate bonds24.6%
Real estate12.5%
Shares23.4%
Regional distribution
Money and deposits28.4%
The Baltic states35.5%
Europe (excl. the Baltic states)15.8%
Asia6.4%
North America9.5%
Other3.2%

The fund has increased the investment in the direction of Estonia

Kristo Oidermaa, Portfolio Manager

May was calm on the global stock markets and the bonds of European countries ended the month with a predominantly positive rate of return. When measured in the local currency, the Japanese stock exchange index increased by 2.4%; however, when measured in euros, it remained at the same level as in April. In the Baltic states, the Tallinn Stock Exchange remained the most modest, falling by 0.7%. The Riga Stock Exchange showed a strong increase of 4.5% and the share index increased by 2.1%. The pension fund also increased its investment in the risk capital fund of Karma Ventures, to the portfolio of which the Estonian software company Plumbr also belongs. In addition, Karma Ventures has invested into the company SpectX, which deals with data analysis, and into the Swedish company Adaptive Simulations, which offers mathematical simulation service.

All of the main market segments remained on the plus side on the European bond markets in May, although, a bit surprisingly, the best results were achieved by government bonds and the bonds of companies with the lowest credit ratings. When measured from the beginning of the year, risk-free interest is moving within a remarkably narrow corridor, without a clear trend. In this type of environment, we will continue to focus on OTC instruments in our search for new investment objects. In the search for such investments and the creation of instruments, we reached an agreement towards the end of May to finance the investment plans of Riigi Kinnisvara AS. The conditions of the bonds have been compiled based on the status and size of RKAS and on the conditions characteristic to a large undertaking. This is the third Estonian bond into which the pension funds of LHV have invested during the spring—previously, the funds that received financing were the redemption of the Auto24 portal and Transpordi Varahaldus OÜ. Work on analysing local projects and finding new issuers is happening now, and we also hope to find further upgrades to our current portfolio.

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 31.05.2017)5,307,116.36

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

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 31.05.2017

Biggest investments
Vanguard FTSE All-World UCITS ETF9.72%
iShares Core MSCI Emerging Markets ETF9.62%
BNP Paribas Easy FTSE EPRA/NAREIT Eurozone Capped9.56%
iShares Global REIT ETF9.20%
Vanguard Total World Stock ETF9.08%
iShares Core MSCI World UCITS8.98%
db x-trackers MSCI World Index UCITS ETF8.97%
Vanguard FTSE Emerging Markets ETF8.89%
SPDR Dow Jones Global Real Estate ETF5.81%
iShares Edge MSCI World Minimum Volatility UCITS E5.47%
Current asset allocation
Money and deposits0.3%
Real estate26.5%
Shares73.3%
Regional distribution
Money and deposits0.3%
Emerging Markets23.6%
Frontier Markets2.7%
Developed Markets73.5%

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

viisemann avatar

LHV: EUR 100 million worth of investment decisions addressing Estonia

Andres Viisemann, Head of LHV Pension Funds

Once again, the month of May was tranquil for securities markets. The S&P500 index, which reflects the activity of large-cap U.S. equities, set new records in May. It seems that investors no longer care about the potential risks on securities markets as they once did and are not reducing their risk positions before the start of the holiday period. Why should they when the grass seems greener and the weather warmer than ever before and all complicated problems seems to have an adequate supply of simple solutions.

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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