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

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 30.11.2017)20,835,664.47 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund110 000 units

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

AS SEB Pank

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

The data is presented as at 30.11.2017

Biggest investments
France 05/20276.95%
Riigi Kinnisvara 06/20274.84%
Czech Republic 05/20224.59%
Temasek Financial 03/20224.25%
Transpordi Varahaldus 04/20254.24%
Slovakia 11/20243.83%
Elering 07/20183.67%
United States 08/20192.84%
Amber Circle Funding 12/20222.71%
Latvenergo 05/20202.15%
Current asset allocation
Money and deposits38.0%
Government bonds26.9%
Corporate bonds35.2%
Regional distribution
Money and deposits38.0%
The Baltic states26.4%
Europe (excl. the Baltic states)19.6%
Asia8.9%
North America2.8%
Other4.2%

European corporate bond market had a good month

Romet Enok, portfellihaldur

We participated in another IPO, when the development bank Altum owned by the Latvian State made its first bond issue. These are 7-year bonds, redeemed upon maturity with a bullet repayment, annual interest rate is 1.3% and they have a credit rating just one grade lower than that of the Latvian government bonds. The better rate of return compared to the latter also ensured high interest in the issue and the price increase of the first month remained at a comparable size with the interest payable in a year.

In addition, the fund made its last bigger disbursement to Riigi Kinnisvara AS, as a result of which the bonds formed the largest position of the fund in the corporate segment. We are satisfied with the fund’s position in non-market instruments and use the legislative threshold to keep such instruments to the full extent, i.e., within 10% of the fund’s assets. In liquid bonds, the European government instruments had a strong month, where the results by markets extended from 0.5% in Germany to 2.2% in Italy. Given the situation, it was only natural that the fund’s biggest single position, i.e. the French long-term bonds also gave strong results, yielding nearly 1.5% in a month.

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 30.11.2017)64,173,535.89 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund270 000 units

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

AS SEB Pank

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

The data is presented as at 30.11.2017

Biggest investments
Riigi Kinnisvara 06/20274.87%
Transpordi Varahaldus 04/20254.36%
Temasek Financial 03/20224.18%
Latvenergo 06/20224.10%
Slovakia 11/20243.93%
Investor 05/20233.29%
Latvia 09/20252.94%
Romania 10/20242.56%
Amber Circle Funding 12/20222.55%
Elering 07/20182.54%
Current asset allocation
Money and deposits28.8%
Government bonds19.7%
Corporate bonds51.6%
Regional distribution
Money and deposits28.8%
The Baltic states26.4%
Europe (excl. the Baltic states)27.8%
Asia7.2%
North America5.0%
Other4.9%

WEuropean corporate bond market had a good month

Romet Enok, Portfolio Manager

We participated in another IPO, when the development bank Altum owned by the Latvian State made its first bond issue. These are 7-year bonds, redeemed upon maturity with a bullet repayment, annual interest rate is 1.3% and they have a credit rating just one grade lower than that of the Latvian government bonds. The better rate of return compared to the latter also ensured high interest in the issue and the price increase of the first month remained at a comparable size with the interest payable in a year.

In addition, the fund made its last bigger disbursement to Riigi Kinnisvara AS, as a result of which the bonds formed the largest position of the fund in the corporate segment. We are satisfied with the created position in non-market instruments and use the legislative threshold to keep such instruments to the full extent, i.e., within 10% of the fund’s assets. The European corporate bond market had a good month, where the overall decrease in interest rates in the Eurozone also boosted the price increase of corporate bonds. In this environment, the fund gained the most from larger positions in the Investor AB and Temasek, when the price increase of bonds of both investment firms remained at the level of 0.5%.

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?

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 30.11.2017)93,854,078.78 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund380 000 units

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

AS SEB Pank

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

The data is presented as at 30.11.2017

Biggest investments
EfTEN Kinnisvarafond4.96%
Riigi Kinnisvara 06/20274.51%
Transpordi Varahaldus 04/20253.81%
Tartu Linnavalitsus 10/20322.95%
Autolist 04/20222.58%
Latvenergo 06/20222.44%
Citadele banka 12/20262.39%
Lithuania 11/20242.08%
Latvia 01/20212.05%
Latvia 09/20252.04%
Current asset allocation
Money and deposits22.9%
Government bonds11.7%
Corporate bonds49.4%
Real estate8.3%
Shares7.7%
Regional distribution
Money and deposits22.9%
The Baltic states48.1%
Europe (excl. the Baltic states)15.5%
Asia3.1%
North America9.2%
Other1.2%

The fund invested in bonds of the City of Tartu

Romet Enok, Portfolio Manager

October was once again a strong month for equity markets. A very good rate of return was demonstrated by the Japanese exchange index, which made an upsurge of 8.1% measured in local currency and 8.5% measured in euros. In addition, a positive result was shown by most of the stock indexes of the European countries, led by Germany and France. In the Baltics, the strongest stock exchange was that of Vilnius with a 2.9% rate of return and also Riga made a sound 2.3% increase. On the other hand, the Tallinn stock market declined by 0.8% over the month. The share of Tallinna Kaubamaja Group had a negative impact on the rate of return of Pension Fund M, which dropped by 4% due to slightly weaker than expected quarterly results. Olympic Entertainment Group, however, reported strong quarterly results and their share increased by 2.2% over the month.

The City of Tartu chose us and the Nordic Investment Bank as the investors of the bonds issued by the city and the fund made an investment into the bonds of Estonian local governments. The City of Tartu has long-term experience in issuing bonds, however so far the investors have been the banks operating in Estonia or international financial institutions. The bonds issued this year have a floating interest rate nearly half of a percentage point above the euribor. The city will redeem the bonds within 15 years. We consider the bond of Tartu attractive given the situation where the government bonds are offering an extremely low or even negative return. The bonds of the City of Tartu now make up one of the largest positions in the portfolio, following the states and state enterprises. The fund did not add any bonds from the international market this month, since the prices went up on both the government as well as corporate markets. The biggest impact on the fund’s result from among the bond positions came from the price increase of Bulgarian government bonds.

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 30.11.2017)743,174,436.18 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 400 000 units

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

AS SEB Pank

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

The data is presented as at 30.11.2017

Biggest investments
EfTEN Kinnisvarafond5.40%
Riigi Kinnisvara 06/20274.66%
Latvia 01/20213.26%
Latvia 09/20253.23%
JP Morgan Chase 08/20212.46%
Wells Fargo & Company 07/20212.44%
Lithuania 11/20242.36%
Lithuania 01/20242.31%
Morgan Stanley 12/20181.88%
Goldman Sachs 12/20181.83%
Current asset allocation
Money and deposits17.4%
Government bonds15.8%
Corporate bonds40.2%
Real estate8.7%
Shares18.0%
Regional distribution
Money and deposits17.4%
The Baltic states45.4%
Europe (excl. the Baltic states)19.2%
Asia6.0%
North America10.8%
Other1.2%

The fund’s performance was supported by investments into Finnish companies and the price increase of Bulgarian government bonds

Kristo Oidermaa, Portfolio Manager

October was once again a strong month for equity markets. A very good rate of return was demonstrated by the Japanese exchange index, which made an upsurge of 8.1% measured in local currency and 8.5% measured in euros. In addition, a positive result was shown by most of the stock indexes of the European countries, led by Germany and France. In the Baltics, the Vilnius stock exchange, with a 2.9% increase, was the strongest. The good return of Pension Fund L was supported by investments into Finnish companies. For example, Neste reported really solid quarterly results in October – the comparable profit of the company made an upsurge of 32.6% in a year due to the strong demand for oil products. Owing to this, the share price on the Helsinki Stock Exchange went up by 26.8% over the month. The Finnish forestry companies Stora Enso and Metsä Board were also strong. Against the backdrop of good quarterly results, the share of Stora Enso rose by 11.5% and that of Metsä Board by 8.1%.

The City of Tartu chose us and the Nordic Investment Bank as the investors of the bonds issued by the city and the fund made an investment into the bonds of Estonian local governments. The City of Tartu has long-term experience in issuing bonds, however so far the investors have been the banks operating in Estonia or international financial institutions. The bonds issued this year have a floating interest rate nearly half a percentage point above the euribor. The city will redeem the bonds within 15 years. The fund did not add any bonds from international market this month, since the prices went up on both the government as well as corporate bond market. The biggest impact on the fund’s result from among the bond positions came from the price increase of Bulgarian government bonds. The focus of the bond portfolio continues to be on creating non-market instruments.

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 30.11.2017)133,703,480.16 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund500 000 units

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

AS SEB Pank

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

The data is presented as at 30.11.2017

Biggest investments
EfTEN Kinnisvarafond4.98%
Riigi Kinnisvara 06/20274.37%
East Capital Baltic Property Fund II2.97%
Latvia 09/20252.95%
WisdomTree Japan Hedged Equity Fund2.61%
Amber Circle Funding 12/20222.37%
JP Morgan Chase 08/20212.31%
Wells Fargo & Company 07/20212.29%
iShares STOXX Europe 600 Health Care2.26%
Citadele banka 11/20271.91%
Current asset allocation
Money and deposits25.9%
Government bonds6.9%
Corporate bonds33.8%
Real estate11.6%
Shares21.8%
Regional distribution
Money and deposits25.9%
The Baltic states39.4%
Europe (excl. the Baltic states)15.1%
Asia7.7%
North America10.0%
Other2.0%

A good month on equity markets, good return shown by the Japanese exchange index

Kristo Oidermaa, Portfolio Manager

October was once again a strong month for equity markets. A very good rate of return was demonstrated by the Japanese exchange index, which made an upsurge of 8.1% measured in local currency and 8.5% measured in euros. The Japanese economy is showing increasing signs of recovery – for example, retail trade sale increased by 2.2% in September, being the 11th month of growth in a row. Also, the election victory of the current prime minister of Japan, Shinzo Abe and the promise of the central bank to continue with its stimulus programme of the economy added confidence for the investors. In the Baltics, the strongest stock exchange was that of Vilnius with a 2.9% rate of return and also Riga made a sound 2.3% increase. On the other hand, the Tallinn stock market declined by 0.8% over the month. The performance of the pension fund was also supported by investments into the Finnish forestry shares. Against the backdrop of good quarterly results, the share of Stora Enso rose by 11.5% and that of Metsä Board by 8.1%.

The biggest contribution in the bond portfolio came from an almost one percentage point price increase in the Bulgarian government bonds. October was largely favourable for bonds – in Europe, both the government as well as corporate bonds showed a solid return. Despite this, the rate of return for the 10 first months of the year exceeded just over one per cent. Given this environment, we still prefer the creation of non-market instruments – during the month, the fund acquired another part of the bond issue of Riigi Kinnisvara AS.

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 30.11.2017)7,239,185.25 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

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

AS 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 30.11.2017

Biggest investments
iShares Global REIT ETF9.41%
Amundi Index FTSE EPRA Nareit Global UCITS ETF8.95%
db x-trackers MSCI World Index UCITS ETF7.81%
Vanguard Total World Stock ETF7.72%
iShares Core MSCI Emerging Markets ETF7.49%
Vanguard FTSE All-World UCITS ETF7.30%
BNP Paribas Easy FTSE EPRA/NAREIT Eurozone Capped7.28%
Vanguard FTSE Emerging Markets ETF7.16%
iShares Core MSCI World UCITS6.81%
db x-trackers MSCI USA Index UCITS ETF4.86%
Current asset allocation
Money and deposits0.0%
Real estate26.5%
Shares73.5%
Regional distribution
Money and deposits0.0%
Emerging Markets23.3%
Frontier Markets2.5%
Developed Markets74.2%

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

Overdose of optimism on the global markets
Andres Viisemann, Head of LHV Pension Funds

After a minor setback this summer, stock markets were once again moving in an upward trend in October. Following the victory by Donald Trump in the United States presidential election the S&P 500 Index has risen by more than 20%. Half of this rise can be explained by the growth in company profits and the other half by investor optimism.

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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