II pillar

LHV funds are no 1 in accruing pension since 2002¹

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 30.11.2018)20,382,908.94 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund110 000 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
France 05/20275.59%
Germany 09/20224.76%
Czech Republic 05/20224.52%
Temasek Financial 03/20224.32%
Riigi Kinnisvara 06/20273,95%
Transpordi Varahaldus 04/20253.88%
Slovakia 11/20243.84%
United States 08/20193.01%
Amber Circle Funding 12/20222.78%
Stedin Holding 10/20222.54%
Current asset allocation
Money and deposits27.66%
Government bonds30.43%
Corporate bonds41.93%
Regional distribution
Money and deposits27.66%
The Baltic states27.95%
Europe (excl. the Baltic states)28.05%
Asia9.07%
North America3.01%
Other4.28%

Fund’s performance remains positive

Romet Enok, Fund Manager

All larger government bond markets once again remained in the red in October – Europe and the United States minimally, -0.1% to -0.2%, developing markets much more abruptly, up to -1.8%. In Europe, yet again the traditional pattern was seen, with Italian government bonds dropping and German bonds increasing. The picture has not changed compared to the beginning of the year – the only market offering a positive return as at the end of October was Germany with +1.2%. The worst result was shown by Italy and developing markets with a decline even extending to -6.5%.

We are still staying out of these markets and are also keeping our risks low in respect of German bonds that have so far performed strongly, but where the loss could be among the biggest, if interest rises in the future. Keeping the risks low helped the fund to remain slightly positive in October, as well as when measured from the start 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 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 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 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 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 30.11.2018)59,327,873.12 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund270 000 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
Temasek Financial 03/20224.50%
Latvenergo 06/20224.41%
Transpordi Varahaldus 04/20254.22%
Luminor Bank 10/20214.19%
Riigi Kinnisvara 06/20274.07%
Investor 05/20233.42%
Total Capital Intl 03/20203.04%
France 10/20222.76%
Amber Circle Funding 12/20222.76%
Romania 10/20242.75%
Current asset allocation
Money and deposits13.61%
Government bonds17.16%
Corporate bonds69.20%
Regional distribution
Money and deposits13.61%
The Baltic states26.71%
Europe (excl. the Baltic states)41.97%
Asia7.75%
North America7.27%
Other2.66%

Fund’s performance remains positive

Romet Enok, Fund Manager

In October, we made a big investment in the fund, when Luminor issued bonds to the international market for the first time. Already at the end of the previous year, several LHV pension funds acquired the non-listed bonds of Luminor with the expectation that when the bank starts to raise large amounts of money from the international market, we will be going to exchange the bonds for new ones.

When the valid regulations did not enable us to own this non-market bond in the S-fund, we could also subscribe to the new bond here. Since the time of the issue coincided with the accusations erupting around Danske, we believe that Luminor had to offer the investors clearly higher interest than comparable companies and based on this attractiveness we made one of the biggest investments on account of the bond, amounting to nearly 4.5% of the fund’s assets. The expected annual rate of return of the bond is 1.6%; besides, the interest rise risk is mitigated with quite a short maturity – the bank will redeem the bonds in three years.

For comparison, the international bond markets in Europe, the USA as well as developing markets once again remained in the red. Measured from the start of the year, the loss of markets has ranged from -0.5% to -3.5%. Keeping the risks low helped the fund to remain slightly positive in October, as well as when measured from the start 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 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 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 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 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 30.11.2018)113,693,030.97 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund380 000 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
Luminor Bank 10/20214.01%
EfTEN Kinnisvarafond3.73%
Riigi Kinnisvara 06/20273.37%
France 10/20222.84%
Transpordi Varahaldus 04/20252.82%
Berkshire Hathaway 01/20212.77%
Tartu Linnavalitsus 10/20322.27%
Coop Pank 12/20272.08%
Latvenergo 06/20222.00%
Citadele banka 12/20261.98%
Current asset allocation
Money and deposits2.41%
Government bonds11.30%
Corporate bonds70.22%
Real estate7.67%
Shares8.44%
Regional distribution
Money and deposits2.41%
The Baltic states51.22%
Europe (excl. the Baltic states)31.21%
Asia2.55%
North America12.60%
Other0.05%

Two major investments were made in the fund’s bond portfolio

Romet Enok, Fund Manager

October was a turbulent month on global stock markets and the stock exchanges of developed as well as developing countries fell. The Japanese stock exchange was hit the worst, with the value of the index dropping by 9.1% in a month, when measured in the local currency. The biggest losers among European countries were Finland with -8.9% and Germany with -6.5% return. This time, the Baltic stock markets, which so far had held up well, also went along with the decline. Vilnius stock exchange dropped 5.5% and the values of Tallinn and Riga stock indices decreased by 2.9% and 2.6%, respectively.

In October, several Baltic public companies reported weak results for Q3. For example, Ekspress Grupp managed to increase its revenues by 4% in a year, although due to fierce competition the company generated a loss in Q3. This is why the share of Ekspress dropped 15.9% in October. The revenues of the Lithuanian clothing retailer Apranga increased 1% over the last year, yet the adjusted profit declined by 32%. The share of the company even fell 17.1% in October.

We made two major investments in the fund’s bond portfolio. First, Luminor bank sold international bonds – the expected rate of return is 1.6% and repayment will be after three years. As previously planned, we replaced the bonds issued by Luminor for the funds at the end of last year with the new investment. Second, we purchased subordinated bonds of Danske Bank when their price dropped as the accusations worsened in connection with suspected money laundering. A significant fine is most likely what will follow for the bank. On the other hand, the core activities and markets that are important for the bank remained untouched by accusations and still have very good profitability.

The biggest Danish investment fund and important shareholder of Danske Bank has announced its support to help the bank overcome the problems. The investment is made into subordinated dollar bonds, where the first possibility for the bank to redeem them is in six months and which, as such, offer a nearly 8% annual rate of return.

From international bond markets, Europe remained slightly negative in October, while the decline in the US and developing countries was more severe. The same situation can be seen when measured from the start of the year – -0.5% for Europe up to -3.5% for developing markets

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 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 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 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 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 30.11.2018)813,959,888.39 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 400 000 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
EfTEN Kinnisvarafond4.50%
Luminor Bank 10/20213.99%
Riigi Kinnisvara 06/20273.85%
France 10/20223.14%
Latvia 01/20212.63%
JP Morgan Chase 08/20212.28%
Wells Fargo & Company 07/20212.26%
Siauliu Bankas 12/20201.98%
Lithuania 01/20241.77%
East Capital Baltic Property Fund III1.74%
Current asset allocation
Money and deposits2.01%
Government bonds14.45%
Corporate bonds52.63%
Real estate10.03%
Shares20.90%
Regional distribution
Money and deposits2.01%
The Baltic states51.65%
Europe (excl. the Baltic states)30.88%
Asia4.56%
North America10.79%
Other0.13%

The month was turbulent for stock markets

Kristo Oidermaa, Fund Manager

October was a turbulent month on global stock markets and the stock exchanges of developed as well as developing countries fell. The Japanese stock exchange was hit the worst, with the value of the index dropping by 9.1% in a month, when measured in the local currency. The level of the stock index, including the 50 largest European public companies, dropped 5.9% over the month, and by countries, the biggest losers were Finland with -8.9% and Germany with -6.5% return. This time, the Baltic stock markets, which so far had held up well, also went along with the decline. Vilnius stock exchange dropped 5.5% and the values of Tallinn and Riga stock indices decreased by 2.9% and 2.6%, respectively.

The private equity fund Livonia Partners, included in the portfolio of Pension Fund L, made a new investment in October in an Estonian start-up Scoro. This company was founded in Tallinn in 2014 and is developing business management software, which includes project management, customer management and several other functions. Scoro uses the investment for expanding its New York and London branches and for developing software integration and machine learning.

We made two major investments in the fund’s bond portfolio. First, Luminor bank sold international bonds – the expected rate of return is 1.6% and repayment will be after three years. As previously planned, we replaced the bonds issued by Luminor for the funds at the end of last year with the new investment. Second, we purchased subordinated bonds of Danske Bank when their price dropped as the accusations worsened in connection with suspected money laundering. A significant fine is most likely what will follow for the bank. On the other hand, the core activities and markets that are important for the bank remained untouched by accusations and still have very good profitability.

The biggest Danish investment fund and important shareholder of Danske Bank has announced its support to help the bank overcome the problems. The investment is made into subordinated dollar bonds, where the first possibility for the bank to redeem them is in six months and which, as such, offer a nearly 8% annual rate of return.

From international bond markets, Europe remained slightly negative in October, while the decline in the US and developing countries was more severe. The same situation can be seen when measured from the start of the year – -0.5% for Europe up to -3.5% for developing markets.

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 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 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 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 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 30.11.2018)167,069,374.40 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund500 000 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
Luminor Bank 12/20193.96%
EfTEN Kinnisvarafond3.64%
Riigi Kinnisvara 06/20273.25%
France 10/20222.86%
Berkshire Hathaway 01/20212.47%
East Capital Baltic Property Fund II2.43%
East Capital Baltic Property Fund III2.34%
iShares DAX EX2.03%
WisdomTree Japan Hedged Equity Fund1.96%
Amber Circle Funding 12/20221.90%
Current asset allocation
Money and deposits1.58%
Government bonds5.44%
Corporate bonds56.14%
Real estate12.27%
Shares24.56%
Regional distribution
Money and deposits1.58%
The Baltic states43.62%
Europe (excl. the Baltic states)36.76%
Asia5.39%
North America12.44%
Other0.20%

New investments were added to the fund’s bond and stock portfolio

Kristo Oidermaa, Fund Manager

October was a turbulent month on global stock markets and the stock exchanges of developed as well as developing countries fell. The Japanese stock exchange was hit the worst, with the value of the index dropping by 9.1% in a month, when measured in the local currency. The level of the stock index, including the 50 largest European public companies, dropped 5.9% over the months and by countries, the biggest losers were Finland with -8.9% and Germany with -8% rate of return. The stock index in Germany, however, dropped by 6.5%. This time, the Baltic stock markets, which so far had held up well, also went along with the decline.

In October, we acquired the shares of German company Siemens Healthineers, which manufactures the machines used in health care sector, for our Pension Fund XL. The products include X-ray, ultrasound and tomography equipment and also portable surgical tables and blood pressure kits. This is a stably increasing business, supported by demographic processes. Also, this kind of business should sustain a weak economic environment, as health care services are needed despite the phase of the economic cycle.

We made two major investments in the fund’s bond portfolio. First, Luminor bank sold international bonds – the expected rate of return is 1.6% and repayment will be after three years. As previously planned, we replaced the bonds issued by Luminor for the funds at the end of last year with the new investment. Second, we purchased subordinated bonds of Danske Bank when their price dropped as the accusations worsened in connection with suspected money laundering. A significant fine is most likely what will follow for the bank. On the other hand, the core activities and markets that are important for the bank remained untouched by accusations and still have very good profitability.

The biggest Danish investment fund and important shareholder of Danske Bank has announced its support to help the bank overcome the problems. The investment is made into subordinated dollar bonds, where the first possibility for the bank to redeem them is in six months and which, as such, offer a nearly 8% annual rate of return.

From international bond markets, Europe remained slightly negative in October, while the decline in the US and developing countries was more severe. The same situation can be seen when measured from the start of the year – -0.5% for Europe up to -3.5% for developing markets.

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 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 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 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 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 30.11.2018)11,992,330.07 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
Lyxor Core MSCI World DR UCITS27.76%
Amundi Index FTSE EPRA Nareit Global UCITS ETF26.42%
db x-trackers MSCI Emerging Markets Index UCITS21.88%
iShares Core MSCI World UCITS13.34%
db x-trackers MSCI World Index UCITS ETF4.93%
Vanguard FTSE Emerging Markets UCITS ETF2.19%
iShares MSCI Frontier 100 ETF2.03%
Current asset allocation
Money and deposits1.46%
Real estate26.42%
Shares72.13%
Regional distribution
Money and deposits1.46%
Emerging Markets24.07%
Frontier Markets2.03%
Developed Markets72.45%

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 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 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 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 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 30.11.2018)2,213,136.95 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 690 184.87 units

Rate of the depository’s charge0.0588% (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 30.11.2018.

Biggest investments
Birdeye Timber Fund5.02%
EfTEN Kinnisvarafond II4.97%
Tallink Grupp4.97%
Eesti Energia 09/20234.72%
Tallinna Kaubamaja4.60%
auto24 04/20224.60%
Allianz Finance 12/20204.55%
Baltic Horizon Fund 05/20234.53%
Birdeye Timber Fund 24.52%
Luminor Bank 10/20214.49%
Current asset allocation
Money and deposits25.67%
Corporate bonds34.24%
Real estate18.19%
Shares21.89%
Regional distribution
Money and deposits25.67%
The Baltic states58.42%
Europe (excl. the Baltic states)15.90%

An investment into a real estate fund was added to the fund portfolio

Kristo Oidermaa, Romet Enok, Fund Managers

In October, LHV Pensionifond Eesti made an investment in EfTEN Capital Investment Fund IV. Altogether, the fund raised nearly 100 million € from investors. The term of the new fund is 10 years and it invests in cash-generating commercial real estate in all three Baltic countries. The fund’s strategy covers investments in well located, high-quality, low-risk objects with stable cash-flow. The portfolio includes office buildings, trade centres as well as warehouse and industrial buildings. The real estate fund announced its first investment at the beginning of November, when they bought the commercial centre Kadrioru Ärikeskus in Tallinn. The commercial centre was built in 2016 and consists of four office buildings with 6600 square metres of commercial space altogether.

Last month, Luminor Bank took its first step on the international bond market. During the first transaction, commercial papers with a maturity of 3 years and expected rate of return of 1.6% were issued. Since the meetings with investors coincided with the scandal surrounding Danske, according to our estimates, the bank had to pay higher interest on bonds than what would have been expected based on the prices of other similar bonds. Accordingly, we subscribed to the bonds within the permitted volume, i.e. close to the 5% threshold of the fund’s assets.

Market overview of pension funds

LHV pension funds offered shade for the decline in October
Andres Viisemann, Head of LHV Pension Funds

October has always been a nervous month for equity investors, with stock market fluctuations higher than usual. In both October 1929 and October 1987, the US stock markets were in free fall. These stock market crises have been written about so extensively in the history of securities markets that October is considered to be a bad month for stock prices, even though statistics do not confirm this. However, in October this year, stock prices were falling again and only a few markets, such as Brazil and the Philippines, were on the upside.

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