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 31.05.2018)20,144,965.16 €

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 31.05.2018

Biggest investments
France 05/20276.10%
Riigi Kinnisvara 06/20275.00%
Germany 09/20224.88%
Czech Republic 05/20224.57%
Temasek Financial 03/20224.40%
Transpordi Varahaldus 04/20254.16%
Slovakia 11/20243.97%
Elering 07/20183.80%
United States 08/20192.96%
Amber Circle Funding 12/20222.76%
Current asset allocation
Money and deposits27.15%
Government bonds31.33%
Corporate bonds41.51%
Regional distribution
Money and deposits27.15%
The Baltic states29.85%
Europe (excl. the Baltic states)26.51%
Asia9.16%
North America2.96%
Other4.36%

Appreciation of the dollar and investments outside Europe boosted the fund’s performance

Romet Enok, Fund Manager

Most major European government bond markets provided a negative yield of roughly 0.5% in April. We continue to avoid investments in long-term bonds in the euro zone since the outlooks for the yield are not too good. Appreciation of the dollar and investments outside the German/French/Italian/Spanish markets gave the fund a +0.1% yield last month. Encouraging signs from the Central Bank imply that interest rates may be increased in less than a year. It would mean higher interest on investments; however, in view of the current price level, it would likely cause a depreciation of long-term bonds. Given that the market has had so little experience with major negative price developments, there is a considerable risk of over-reaction and we are prepared for this.

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 31.05.2018)60,254,631.44 €

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 31.05.2018

Biggest investments
France 10/20225.30%
Riigi Kinnisvara 06/20275.01%
Temasek Financial 03/20224.46%
Latvenergo 06/20224.41%
Transpordi Varahaldus 04/20254.39%
Investor 05/20233.37%
Total Capital Intl 03/20202.76%
Romania 10/20242.76%
Elering 07/20182.71%
Amber Circle Funding 12/20222.67%
Current asset allocation
Money and deposits13.01%
Government bonds21.19%
Corporate bonds65.78%
Regional distribution
Money and deposits13.01%
The Baltic states26.12%
Europe (excl. the Baltic states)41.19%
Asia7.60%
North America6.90%
Other5.16%

Appreciation of the dollar against the euro had a positive influence on the performance of the fund

Romet Enok, Fund Manager

The corporate bond market of Europe finished April slightly on the plus side; however, the decrease since the beginning of the year amounts to 0.3%. Nevertheless, the fund emerged with a small positive yield, mostly driven by the appreciation of the dollar against the euro. Since the beginning of the year, the cost of money has gone up to some degree for European corporations but the level at the start of the year was clearly the lowest in the past five years.

Thus, the bond markets continue to be inducive to borrowing and the volumes of new transaction remain high. The main factor driving the price activity is also mainly related to the European Central Bank’s expected interest modification, with bolder voices from the headquarters suggesting that it will occur next summer.

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 31.05.2018)106,071,874.28 €

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 31.05.2018

Biggest investments
EfTEN Kinnisvarafond4.16%
Riigi Kinnisvara 06/20273.99%
Transpordi Varahaldus 04/20253.20%
Luminor Bank 12/20193.12%
France 10/20223.10%
Tartu Linnavalitsus 10/20322.61%
Coop Pank 12/20272.23%
Latvenergo 06/20222.17%
Citadele banka 12/20262.12%
auto24 04/20222.09%
Current asset allocation
Money and deposits2.98%
Government bonds12.13%
Corporate bonds68.99%
Real estate8.14%
Shares7.73%
Regional distribution
Money and deposits2.98%
The Baltic states54.55%
Europe (excl. the Baltic states)29.26%
Asia2.69%
North America9.57%
Other0.92%

April was a good month for equity markets but rather poor for European bond markets

Romet Enok, Fund Manager

After several months of unrest, April was predominantly a month of positive yields for global equity markets. For instance, the Japanese stock exchange index, measured in the local currency, increased by 4.7% and the German stock market index – by 4.3%. As for Baltic equity markets, the only one to demonstrate a positive yield in April was the Vilnius stock exchange with a 0.3% increase. The stock exchange indices of Tallinn and Riga dropped by 1.3% and 0.7%, respectively. The Lithuanian Apranga, one of the leading clothes retailers in the Baltics, reported weaker than usual results of the first quarter. The sales revenue decreased by 1.5% yoy, and increased costs meant that Apranga cumulated a loss in the first quarter. Their share declined by 2.3% over the month. However, Tallinna Kaubamaja’s quarterly results were as expected and its shareholders enjoyed record-high dividends.

In April, we added a large local bond investment to the portfolio when the real estate fund Baltic Horizon, listed on the Tallinn stock exchange, raised funds by issuing bonds for investment and bank loan refinancing purposes. Funds were raised for five terms and repayment shall be in bulk upon maturity. The bonds are not connected with or secured by any specific buildings owned by the fund and the loan will be paid out of the rent generated from all their properties. Such flexibility means that the company can pay higher interest compared to bank loans, i.e., 4.25% a year in this case. We also participated in the international bond issue of Elering: the company raised funds for five years at an interest rate of 0.875%. Elering obviously belongs to that segment of the market which benefits from the continued extremely low interest rate policy of the European Central Bank. We can foresee that discontinuance of this policy involves great risks and as we bought these bonds, we also sold long-term Lithuanian government bonds so that the fund’s exposure to interest risks did not change. April was rather poor on the European bond markets: corporate bonds remained barely above zero and government bonds depreciated by 0.4%. The market as a whole has clearly offered lower yields than our portfolio comprised of local issuers.

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 31.05.2018)778,741,737.83 €

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 31.05.2018

Biggest investments
EfTEN Kinnisvarafond4.89%
Riigi Kinnisvara 06/20274.45%
France 10/20223.34%
Luminor Bank 12/20193.31%
Latvia 01/20213.03%
JP Morgan Chase 08/20212.32%
Wells Fargo & Company 07/20212.30%
Lithuania 01/20242.15%
Siauliu Bankas 12/20202.06%
East Capital Baltic Property Fund III1.76%
Current asset allocation
Money and deposits2.44%
Government bonds15.81%
Corporate bonds52.18%
Real estate10.16%
Shares19.40%
Regional distribution
Money and deposits2.44%
The Baltic states53.33%
Europe (excl. the Baltic states)28.19%
Asia5.59%
North America9.46%
Other0.98%

The performance of the fund was driven by Finnish equities and the portfolio of local corporate bonds

Kristo Oidermaa, Fund Manager

After several months of unrest, April was predominantly a month of positive yields for global equity markets. For instance, the Japanese stock exchange index, measured in the local currency, increased by 4.7% and the German stock market index – by 4.3%. However, Turkish and Russian equity markets ended with a negative yield, both down by 9.3% and 7.4%, respectively. As for Baltic equity markets, the only one to demonstrate a positive yield in April was the Vilnius stock exchange with a 0.3% increase. The stock exchange indices of Tallinn and Riga dropped by 1.3% and 0.7%, respectively. The performance of pension fund L was driven in April by Finnish equities, which experienced an upsurge thanks to the improving business environment and good quarterly results. The best yield was demonstrated by the share of the oil refining company Neste, which appreciated by 23.8% over the month. Neste increased their first-quarter sales revenue by 18% and the operating profits were up by as much as 55% compared to the previous year. Other good performers were the shares of the cellulose and paper making corporation Stora Enso (12% increase) and the largest Finnish trading sector company Kesko (5.2% increase).

In April, we added a large local bond investment to the portfolio when the real estate fund Baltic Horizon, listed on the Tallinn stock exchange, raised funds by issuing bonds for investment and bank loan refinancing purposes. Funds were raised for five terms and repayment shall be in bulk upon maturity. The bonds are not connected with or secured by any specific buildings owned by the fund and the loan will be paid out of the rent generated from all their properties. Such flexibility means that the company can pay higher interests compared to bank loans, i.e., 4.25% a year in this case. We also participated in the international bond issue of Elering: the company raised funds for five years at an interest rate of 0.875%. Elering obviously belongs to that segment of the market which benefits from the continued extremely low interest rate policy of the European Central Bank. We can foresee that discontinuance of this policy involves great risks and as we bought these bonds, we also sold long-term Lithuanian government bonds so that the fund’s exposure to interest risks did not change. April was rather poor on the European bond markets: corporate bonds remained barely above zero and government bonds depreciated by 0.4%. The market as a whole has clearly offered lower yields than the interests earnt in the same time frame by our portfolio comprised of local issuers.

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 31.05.2018)152,096,768.53 €

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 31.05.2018

Biggest investments
EfTEN Kinnisvarafond4.16%
Luminor Bank 12/20193.95%
Riigi Kinnisvara 06/20273.84%
East Capital Baltic Property Fund II2.71%
East Capital Baltic Property Fund III2.48%
WisdomTree Japan Hedged Equity Fund2.20%
France 10/20222.20%
Amber Circle Funding 12/20222.05%
JP Morgan Chase 08/20212.01%
Wells Fargo & Company 07/20211.99%
Current asset allocation
Money and deposits1.77%
Government bonds6.89%
Corporate bonds56.07%
Real estate12.96%
Shares22.30%
Regional distribution
Money and deposits1.77%
The Baltic states47.22%
Europe (excl. the Baltic states)33.60%
Asia6.56%
North America9.26%
Other1.58%

The performance of the fund was driven by Finnish equities and the portfolio of local corporate bonds

Kristo Oidermaa, Fund Manager

After several months of unrest, April was predominantly a month of positive yields for global equity markets. For instance, the Japanese stock exchange index, measured in the local currency, increased by 4.7% and the German stock market index – by 4.3%. However, Turkish and Russian equity markets ended with a negative yield, both down by 9.3% and 7.4%, respectively. As for Baltic equity markets, the only one to demonstrate a positive yield in April was the Vilnius stock exchange with a 0.3% increase. The stock exchange indices of Tallinn and Riga dropped by 1.3% and 0.7%, respectively. The yield of pension fund XL was positively influenced by Finnish investments with the shares of Metsä Board performing the best (12.8% increase). In March, Olympic Entertainment Group, listed on the Tallinn stock exchange, received a takeover offer from Odyssey Europe. The share price offered to shareholders was similar to the then stock exchange price. After long deliberations, we decided to accept the offer and in April we sold all the shares of Olympic owned by the pension fund.

In April, we added a large local bond investment to the portfolio when the real estate fund Baltic Horizon, listed on the Tallinn stock exchange, raised funds by issuing bonds for investment and bank loan refinancing purposes. Funds were raised for five terms and repayment shall be in bulk upon maturity. The bonds are not connected with or secured by any specific buildings owned by the fund and the loan will be paid out of the rent generated from all their properties. Such flexibility means that the company can pay higher interests compared to bank loans, i.e., 4.25% a year in this case. We also participated in the international bond issue of Elering: the company raised funds for five years at an interest rate of 0.875%. Elering obviously belongs to the segment of the market which benefits from the continued extremely low interest rate policy of the European Central Bank. We can foresee that discontinuance of this policy involves great risks and as we bought these bonds, we also sold long-term Lithuanian government bonds so that the fund’s exposure to interest risks did not change. April was rather poor on the European bond markets: corporate bonds remained barely above zero and government bonds depreciated by 0.4%. The market as a whole has clearly offered lower yields than the interest earnt in the same time frame by our portfolio comprised of local issuers.

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 31.05.2018)10,280,811.37 €

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 31.05.2018

Biggest investments
Amundi Index FTSE EPRA Nareit Global UCITS ETF14.99%
iShares Core MSCI World UCITS13.64%
db x-trackers MSCI Emerging Markets Index UCITS9.48%
iShares Global REIT ETF6.54%
db x-trackers MSCI World Index UCITS ETF5.72%
Vanguard Total World Stock ETF5.56%
iShares Core MSCI Emerging Markets ETF5.31%
BNP Paribas Easy FTSE EPRA/NAREIT Eurozone Capped5.30%
Vanguard FTSE All-World UCITS ETF5.30%
db x-trackers MSCI USA Index UCITS ETF5.14%
Current asset allocation
Money and deposits1.02%
Real estate27.43%
Shares71.56%
Regional distribution
Money and deposits1.02%
Emerging Markets22.64%
Frontier Markets2.34%
Developed Markets74.01%

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 31.05.2018)1,841,405.98 €

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 31.05.2018

Biggest investments
Eesti Energia 09/20235.91%
auto24 04/20225.53%
Allianz Finance 12/20205.49%
EfTEN Kinnisvarafond II5.48%
Baltic Horizon Fund 05/20235.45%
Daimler Intl Finance 05/20225.43%
Tallinna Kaubamaja4.46%
Tallink Grupp4.11%
BMW 09/20202.88%
BASF 11/20192.73%
Current asset allocation
Money and deposits39.33%
Corporate bonds36.14%
Real estate7.27%
Shares17.26%
Regional distribution
Money and deposits39.33%
The Baltic states41.42%
Europe (excl. the Baltic states)19.25%

Two new investments added to the fund

Kristo Oidermaa, Romet Enok, Fund Managers

In April, we made the first property investment in the new fund besides some earlier equity investments. Eften Kinnisvarafond II was founded in 2015 and invests in cash flow generating properties in all three Baltic states. Today, the portfolio of the fund is comprised of six properties, among which the best known is undoubtedly Radisson Blu hotel in central Tallinn. Rental income is being earnt for investors by two shopping centres – Magistral in Tallinn and one of the largest supermarkets in Riga, Domina. The fund also owns the Marienthal centre in Tallinn and an office building in Riga with office premises rented to several internationally renowned companies. In Lithuania, the real estate fund owns a large logistics centre near Kaunas. The real estate fund Eften II also pays annual dividends to their investors.

We added a large local bond investment to the portfolio when the real estate fund Baltic Horizon, listed on the Tallinn stock exchange, raised funds by issuing bonds for investment and bank loan refinancing purposes. Funds were raised for five terms and repayment shall be in bulk upon maturity. The bonds are not connected with or secured by any specific buildings owned by the fund and the loan will be paid out of the rent generated from all their properties. Such flexibility means that the company can pay higher interest compared to bank loans, i.e., 4.25% a year in this case.

Market overview of pension funds

LHV focuses its investments on companies with growth potential
Andres Viisemann, Head of LHV Pension Funds

After a relatively turbulent beginning of the year, April brought a mainly positive performance on international stock markets. From the largest markets, the Japanese and European stock markets had the best results with their respective increase of 4.7% and 4.6% in local currencies.

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