II pillar

LHV pension funds have the highest 15-year rate of return¹

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

  • how much time you have left until retirement
  • what level of risk you are willing to take

II pillar funds

LHV Pensionifond XS – The safest choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0.585%

Information about the fund

Volume of the fund (as of 30.09.2018)20,214,332.19 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund110 000 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
France 05/20275.57%
Germany 09/20224.77%
Czech Republic 05/20224.57%
Temasek Financial 03/20224.35%
Transpordi Varahaldus 04/20254.18%
Riigi Kinnisvara 06/20273.97%
Slovakia 11/20243.94%
United States 08/20192.97%
Amber Circle Funding 12/20222.74%
Stedin Holding 10/20222.57%
Current asset allocation
Money and deposits26.68%
Government bonds30.70%
Corporate bonds42.62%
Regional distribution
Money and deposits26.68%
The Baltic states28.59%
Europe (excl. the Baltic states)28.33%
Asia9.09%
North America2.97%
Other4.34%

The fund is still the best performer in its category

Romet Enok, Fund Manager

The government bond markets around the world are still pressured by the cycle of rising interest rates in the United States. In other words, we in Europe are in a position where short-term bonds remain at the level of negative expected rates of returns and the price of long-term bonds is falling, i.e. in a position where short-term bonds remain at the level of negative expected rates of returns and the price of long-term bonds is falling. There are only a few segments where short-term bonds do not have a negative rate of return or where long-term bonds do not always move in sync with the general sentiment on the market. These segments, however, mostly respond fairly actively to the problems of the specific country, as is the case with Italian government bonds, for instance.

In this situation, we hold a significant part of the fund's assets in deposits and in local bonds near the maximum volume of local bonds permitted by the rules, as before. XS is the only conservative fund for the second pillar, that has been in positive territory since the beginning of the year.

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2018 the sum is EUR 189.31.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9465 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1893 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2018 is EUR 500.

LHV Pensionifond S – A safe choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0.684%

Information about the fund

Volume of the fund (as of 30.09.2018)59,039,622.44 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund270 000 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
Transpordi Varahaldus 04/20254.53%
Temasek Financial 03/20224.52%
Latvenergo 06/20224.44%
Riigi Kinnisvara 06/20274.08%
Investor 05/20233.42%
Total Capital Intl 03/20203.06%
Romania 10/20242.84%
France 10/20222.82%
Amber Circle Funding 12/20222.71%
Sabic 11/20202.64%
Current asset allocation
Money and deposits12.99%
Government bonds18.85%
Corporate bonds68.17%
Regional distribution
Money and deposits12.99%
The Baltic states24.38%
Europe (excl. the Baltic states)42.40%
Asia7.71%
North America7.23%
Other5.30%

We are gradually adding bonds with a floating interest rate to the fund

Romet Enok, Fund Manager

The additional rate of return of the interest of corporate bonds in relation to government bonds remains stable, but the rise in the interest rates of government bonds is currently a problem for the markets. Thus, in early October the interest rates of the US government’s long-term bonds reached the level they were at in the summer of 2011. It is also lowering bond prices this side of the Atlantic.

At the moment, investing is complicated because of the circumstance that short-term bonds in Europe are still at the level of negative expected rates of returns. This leaves investors very little opportunity for protecting their money. However, we are looking for and using these individual options, for example by again increasing the percentage of floating-rate bonds in the fund.

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2018 the sum is EUR 189.31.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9465 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1893 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2018 is EUR 500.

LHV Pensionifond M - A balanced choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1.008%

Information about the fund

Volume of the fund (as of 30.09.2018)112,819,770.23 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund380 000 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
EfTEN Kinnisvarafond4.04%
Riigi Kinnisvara 06/20273.38%
Transpordi Varahaldus 04/20253.03%
Luminor Bank 12/20192.93%
France 10/20222.90%
Berkshire Hathaway 01/20212.80%
Tartu Linnavalitsus 10/20322.46%
Coop Pank 12/20272.07%
Latvenergo 06/20222.02%
Citadele banka 12/20261.97%
Current asset allocation
Money and deposits1.93%
Government bonds11.52%
Corporate bonds70.03%
Real estate7.80%
Shares8.75%
Regional distribution
Money and deposits1.93%
The Baltic states51.31%
Europe (excl. the Baltic states)31.52%
Asia2.54%
North America12.68%
Other0.05%

We added a new local investment, Venture Capital Fund of Tera Ventures, in the portfolio

Romet Enok, Fund Manager

The result of Pension Fund M was influenced by a 0.9% decline in both German and Finnish stock markets in September. However, the Japanese stock market performed in a positive manner, which in a month rose 3.1% in euros and as much as 5.5% in local currency. September also turned out to be a month with a slightly negative rate of return in Baltic equity markets. The biggest decrease was recorded in the Vilnius Stock Exchange with –1.6%. The Tallinn Stock Exchange fell 0.7% and the Riga Stock Exchange was down 0.1%.

Pension Fund M made a new investment in the Venture Capital Fund of Tera Ventures, which recently raised 21 million euros from investors, including the European Investment Fund. Tera Ventures places capital in early growth tech companies in Estonia and in neighbouring countries. Previously, the company's team has already invested in successful Estonian success stories such as GrabCAD, Cleveron and Monese.

In September, we completely sold the fund’s bonds of one of the largest corporate bonds outside the Baltics - bonds of the Brazilian food industry BRF. The results of the company are expected to worsen and the Brazilian economy has been in difficulty. Nevertheless, the bonds acquired exactly three years ago yielded more than twice the yield on the average market for corporate bonds issued in euros, i.e. around 15%.

In the second significant event in the portfolio, the US investment company Blackstone acquired a majority stake in Luminor Bank. The bank also received an international rating that opens the way to the European bond market and, with it, also replaces our long-term investment we made in the winter with a longer-term loan.

The international bond markets are still pushing for a rise in interest rates in the United States, which has left the main market segments a month behind. We focus on analysing local investment opportunities, as has been the case for some time.

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2018 the sum is EUR 189.31.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9465 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1893 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2018 is EUR 500.

LHV Pensionifond L – LHV’s flagship

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1.260%

Information about the fund

Volume of the fund (as of 30.09.2018)805,317,890.22 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 400 000 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
EfTEN Kinnisvarafond4.88%
Riigi Kinnisvara 06/20273.88%
France 10/20223.22%
Luminor Bank 12/20193.20%
Latvia 01/20212.93%
JP Morgan Chase 08/20212.26%
Wells Fargo & Company 07/20212.24%
Lithuania 01/20242.10%
Siauliu Bankas 12/20202.00%
East Capital Baltic Property Fund III1.74%
Current asset allocation
Money and deposits2.15%
Government bonds15.32%
Corporate bonds52.07%
Real estate10.04%
Shares20.40%
Regional distribution
Money and deposits2.15%
The Baltic states52.20%
Europe (excl. the Baltic states)30.21%
Asia4.71%
North America10.58%
Other0.13%

European equity markets were in slight decline, Japan showed good results

Kristo Oidermaa, Fund Manager

The result of Pension Fund L was influenced by a 0.9% decline in both German and Finnish stock markets in September. However, the Japanese stock market performed in a positive manner, which in a month rose 3.1% in euros and as much as 5.5% in local currency. September also turned out to be a month with a slightly negative rate of return in Baltic equity markets. The biggest decrease was recorded in the Vilnius Stock Exchange with –1.6%. The Tallinn Stock Exchange fell 0.7% and the Riga Stock Exchange was down 0.1%.

The portfolio of the Pension Fund L is, in cooperation with the private equity fund Livonia Partners, an investment in the leading Estonian sauna materials manufacturer Ha Serv. In September, Ha Serv announced that it would join Thermory, another Estonian wood-based company, which produces mainly heat-treated wood materials and provides jobs for more than 200 people. The merger of companies creates a new leader in the market for saunas and heat treated wood. In addition, the merger leads to a reduction in geographical synergies and administrative costs.

In September, we completely sold the fund’s bonds of one of the largest corporate bonds outside the Baltics - bonds of the Brazilian food industry BRF. The results of the company are expected to worsen and the Brazilian economy has been in difficulty. Nevertheless, the bonds acquired exactly three years ago yielded more than twice the rate of return on the average market for corporate bonds issued in euros, i.e. around 15%.

In the second significant event in the portfolio, the US investment company Blackstone acquired a majority stake in Luminor Bank. The bank also received an international rating that opens the way to the European bond market and, with it, also replaces our long-term investment in the winter with a longer-term loan.

The international bond markets are still pushing for a rise in interest rates in the United States, which has left the main market segments a month behind. We focus on analysing local investment opportunities, as has been the case for some time.

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2018 the sum is EUR 189.31.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9465 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1893 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2018 is EUR 500.

LHV Pensionifond XL - The boldest choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1.260%

Information about the fund

Volume of the fund (as of 30.09.2018)163 943 279,97 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund500 000 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
EfTEN Kinnisvarafond3.98%
Luminor Bank 12/20193.67%
Riigi Kinnisvara 06/20273.25%
France 10/20222.96%
Berkshire Hathaway 01/20212.52%
East Capital Baltic Property Fund II2.49%
East Capital Baltic Property Fund III2.36%
WisdomTree Japan Hedged Equity Fund2.16%
iShares STOXX Europe 600 Health Care1.93%
Amber Circle Funding 12/20221.89%
Current asset allocation
Money and deposits1.54%
Government bonds7.32%
Corporate bonds56.41%
Real estate12.17%
Shares22.59%
Regional distribution
Money and deposits1.54%
The Baltic states45.23%
Europe (excl. the Baltic states)34.81%
Asia5.59%
North America12.66%
Other0.20%

European equity markets were in slight decline, Japan showed good results

Kristo Oidermaa, Fund Manager

The result of Pension Fund XL was influenced by a 0.9% decline in both German and Finnish stock markets in September. However, the Japanese stock market performed in a positive manner, which in a month rose 3.1% in euros and as much as 5.5% in local currency.

The good returns were mainly achieved in Japan because Prime Minister Shinzo Abe has won the election again and continues to be prime minister. This result pleased the investors, as it offers political stability to financial markets, and a favourable monetary policy is likely to continue for some time. The economic growth and inflation rates of the country have also shown signs of recovery, and the company's growing profits are supported by the weaker exchange rate of the yen. For example, the portfolio of the pension fund XL that includes Seven & I, a holding company which owns 7-Eleven convenience stores in Japan, rose 11.2% on the Tokyo Stock Exchange in a month.

In September, we completely sold the fund’s bonds of one of the largest corporate bonds outside the Baltics - bonds of the Brazilian food industry BRF. The results of the company are expected to worsen and the Brazilian economy has been in difficulty. Nevertheless, the bonds acquired exactly three years ago yielded more than twice the rate of return on the average market for corporate bonds issued in euros, i.e. around 15%.

In the second significant event in the portfolio, the US investment company Blackstone acquired a majority stake in Luminor Bank. The bank also received an international rating that opens the way to the European bond market and, with it, also replaces our long-term investment in the winter with a longer-term loan.

The international bond markets are still pushing for a rise in interest rates in the United States, which has left the main market segments a month behind. We focus on analysing local investment opportunities, as has been the case for some time.

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2018 the sum is EUR 189.31.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9465 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1893 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2018 is EUR 500.

LHV Pensionifond Indeks – Continuous investment

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0.39%

Information about the fund

Volume of the fund (as of 30.09.2018)11,962,537.47 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
Lyxor Core MSCI World DR UCITS29.13%
Amundi Index FTSE EPRA Nareit Global UCITS ETF25.94%
db x-trackers MSCI Emerging Markets Index UCITS21.41%
iShares Core MSCI World UCITS12.97%
db x-trackers MSCI World Index UCITS ETF5.18%
Vanguard FTSE Emerging Markets UCITS ETF2.22%
iShares MSCI Frontier 100 ETF2.05%
Current asset allocation
Money and deposits1.10%
Real estate25.94%
Shares72.96%
Regional distribution
Money and deposits1.10%
Emerging Markets23.63%
Frontier Markets2.05%
Developed Markets73.22%

The type of disbursement depends on how much you have accumulated in the fund. The type of payments can be predicted with the concept of the national pension rate, the sum of which is established on the basis of an annually set index. Since April 2018 the sum is EUR 189.31.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9465 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1893 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2018 is EUR 500.

LHV Pensionifond Eesti – maximum investment in Estonia

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

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

Information about the fund

Volume of the fund (as of 30.09.2018)1,988,858.50 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund2 343 750 units

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

DepositoryAS SEB Pank

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

The data is presented as at 30.09.2018

Biggest investments
Birdeye Timber Fund5.59%
EfTEN Kinnisvarafond II5.42%
Eesti Energia 09/20235.32%
auto24 04/20225.18%
Baltic Horizon Fund 05/20235.09%
Allianz Finance 12/20205.08%
Daimler Intl Finance 05/20225.01%
Tallinna Kaubamaja4.53%
Tallink Grupp4.51%
Merko Ehitus3.19%
Current asset allocation
Money and deposits32.33%
Corporate bonds33.34%
Real estate12.98%
Shares21.35%
Regional distribution
Money and deposits32.33%
The Baltic states49.92%
Europe (excl. the Baltic states)17.75%

The Fund's investment results moved in different directions

Kristo Oidermaa, Romet Enok, Fund Managers

The Baltic stock markets have remained calm over the last few months and the stock indices have not fluctuated to a greater degree. The Tallinn Stock Exchange fell 0.7% in September: a few large institutional investors have been selling and it has created sales pressure on shares of several listed companies. The biggest decreases were posted by Arco Vara, a real estate developer (–8.4%), and the shipping company Tallink (–5.4%).

However, the rate of return of the pension fund had a positive impact, for example, from the shares of Ekspress Group and Port of Tallinn, with rate of returns of 4.1% and 6.5%, respectively. The shares of the Port of Tallinn were supported, in addition to good quarterly results, by comprehensive analysis of several banks, as well as the price pattern for the next 12 months. Most analysts expect the share price to stay at 2.2 euros.

Market overview of pension funds

Bond markets are waiting for change
Andres Viisemann, Head of LHV Pension Funds

August was a fairly nerve-racking month on the securities markets. European corporate shares lost 2.3% of their value. The stock prices of Estonian equities declined by 2.8%. While most of the world's stock markets remained negative, the technology sector helped the US stock market to reach a small plus in euro terms

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