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 31.12.2017)20,762,707.53 €

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 31.12.2017

Biggest investments
France 05/20276.91%
Riigi Kinnisvara 06/20274.82%
Germany 09/20224.71%
Czech Republic 05/20224.60%
Transpordi Varahaldus 04/20254.27%
Temasek Financial 03/20224.25%
Slovakia 11/20243.84%
Elering 07/20183.69%
United States 08/20192.81%
Amber Circle Funding 12/20222.65%
Current asset allocation
Money and deposits30.7%
Government bonds31.6%
Corporate bonds37.7%
Regional distribution
Money and deposits30.7%
The Baltic states26.5%
Europe (excl. the Baltic states)26.9%
Asia8.8%
North America2.8%
Other4.2%

We continue to avoid adding interest risk

Romet Enok, portfellihaldur

In November, the French and Italian government bond markets were the strongest among large member states of the euro zone. While the German bonds in essence offered a zero rate of return, on the Italian bond market, the gain even amounted to 0.5%. Given this environment, once again of course our French government bonds, bought in summer, showed a good return, yielding at a total of nearly 0.7%. Whereas the French bonds reached their highest price level YTD. Also, the difference in the return compared to German bonds declined to the lowest level since their issue in spring.

The future outlook of government bonds is still poor while the probable final term of the European Central Bank support measures is coming closer and the economy of the monetary union is in a good state.

No new investments were added to the fund during the month. We are still avoiding any additions to interest risk and are seeking alternative investment opportunities. Based on that, the fund made the last payment of Riigi Kinnisvara AS under the bond contract signed in 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 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund S – A safe choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,79800%

Information about the fund

Volume of the fund (as of 31.12.2017)64,216,822.14 €

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 31.12.2017

Biggest investments
France 10/20224.95%
Riigi Kinnisvara 06/20274.83%
Transpordi Varahaldus 04/20254.36%
Temasek Financial 03/20224.17%
Latvenergo 06/20224.11%
Slovakia 11/20243.92%
Investor 05/20233.27%
Latvia 09/20252.96%
Romania 10/20242.58%
Elering 07/20182.54%
Current asset allocation
Money and deposits24.3%
Government bonds24.6%
Corporate bonds51.1%
Regional distribution
Money and deposits24.3%
The Baltic states26.2%
Europe (excl. the Baltic states)32.6%
Asia7.1%
North America4.9%
Other4.9%

High price level of bonds does not encourage one to make new investments

Romet Enok, Portfolio Manager

In November, the corporate bond market in Europe remained slightly in the red in the expectation that Euribor will rise in the future. At the same time, the risk premiums of bonds dropped to their lowest level in this cycle. In other words, the riskiness of corporate bonds is currently assessed to be the lowest of the last decade.

Considering how long the growth phase has already lasted, we are cautious and do not add any new investments at such a high price level. The fund made the last payment from alternative investment opportunities, to take into use the limit which is based on the bond contract concluded with Riigi Kinnisvara AS in 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 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund M - A balanced choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1,06400%

Information about the fund

Volume of the fund (as of 31.12.2017)94,507,387.07 €

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 31.12.2017

Biggest investments
EfTEN Kinnisvarafond4.75%
Riigi Kinnisvara 06/20274.44%
Transpordi Varahaldus 04/20253.80%
Luminor Bank 12/20193.49%
France 10/20223.46%
Tartu Linnavalitsus 10/20322.93%
Autolist 04/20222.56%
Coop Pank 12/20272.43%
Latvenergo 06/20222.42%
Citadele banka 12/20262.32%
Current asset allocation
Money and deposits6.0%
Government bonds15.2%
Corporate bonds62.9%
Real estate8.3%
Shares7.8%
Regional distribution
Money and deposits6.0%
The Baltic states57.6%
Europe (excl. the Baltic states)22.0%
Asia3.0%
North America10.3%
Other1.2%

European stock markets declined, positive surprises came from Japan

Romet Enok, Portfolio Manager

Once again, November appeared to be positive for the Japanese stock market, where the Tokyo Stock Exchange rose by 3.2% in local currency and by 2.2% measured in euros. On European stock markets, however, November was a month with a negative rate of return: the stock markets in Germany, France, Sweden, Finland as well as Great Britain were all in a state of decline. The level of stock index, including the 50 largest European companies, altogether dropped 2.8% by the end of the month.

The best result in the Baltics last month was achieved by the Riga Stock Exchange index with a 3% increase. The result was not even influenced by the fact that the stocks of pharmaceutical companies Grindeks and OIainfarm dropped by 4.2% and 2.3%, respectively, due to weak quarterly results. The Tallinn Stock Exchange index rose by 1.8% in November, partly due to the biggest listed company, Tallink. The shipping company reported very strong quarterly results and the stock rose by 7.6% in a month.

November passed without any bigger movements on the European bond markets. Government bonds offered a slightly positive and corporate bonds some negative rate of return.

In November, we fully sold the fund’s biggest investment outside the Baltics – the Bulgarian government bonds. While at the time of their issue and the acquisition of our position in summer 2014, the state’s reputation was still strongly associated with the financial crisis, for now, Bulgaria is close to becoming a member of the euro zone. The declined risk level brought along a notable price increase of bonds and thus, the rate of return of the investment rose slightly over 26% in three and a half years.

From new investments, the Citadel bank bonds were added to the portfolio. Likewise to the issue last winter, this time the biggest investors in the bank’s subordinated bond issue were also LHV’s pension funds. While the annual interest of bonds issued last December is 6.25%, this offer was at the interest level of 5.5% In addition, the fund made its last payment to Riigi Kinnisvara AS under the bond contract signed in summer. We will continue to work with several local companies and still hope to supplement the portfolios with bonds of local companies this 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 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund L – LHV’s flagship

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1,33000%

Information about the fund

Volume of the fund (as of 31.12.2017)749,904,423.91 €

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 31.12.2017

Biggest investments
EfTEN Kinnisvarafond5.16%
Riigi Kinnisvara 06/20274.59%
France 10/20223.46%
Luminor Bank 12/20193.43%
Latvia 01/20213.23%
Latvia 09/20253.22%
JP Morgan Chase 08/20212.40%
Wells Fargo & Company 07/20212.39%
Lithuania 11/20242.33%
Lithuania 01/20242.31%
Current asset allocation
Money and deposits4.0%
Government bonds19.1%
Corporate bonds50.1%
Real estate8.9%
Shares17.9%
Regional distribution
Money and deposits4.0%
The Baltic states51.0%
Europe (excl. the Baltic states)26.4%
Asia5.9%
North America11.6%
Other1.2%

European stock markets declined, positive surprises came from Japan

Kristo Oidermaa, Portfolio Manager

Once again, November appeared to be positive for the Japanese stock market, where the Tokyo Stock Exchange rose by 3.2% in local currency and by 2.2% measured in euros. On European stock markets, however, November was a month with a negative rate of return: the stock markets in Germany, France, Sweden, Finland as well as Great Britain were all in a state of decline. The level of stock index, including the 50 largest European companies, altogether dropped 2.8% by the end of the month.

In the Baltics, the strongest was the Riga stock market with a 3% increase, but also the Tallinn Stock Exchange showed a good 1.8% return in November. The Vilnius stock exchange index, on the contrary, remained in essence at the same level as October, moving by –0.1%.

The private equity fund BPM Mezzanine Fund, belonging to L portfolio of the pension fund made a new investment and supported the growth of Tahe Outdoors. This company, founded in Estonia, is one of the leading water sport equipment producers in Europe, the production of which includes kitesurfing as well as canoes, kayaks and miscellaneous rowing equipment.

November passed without any bigger movements on the European bond markets. Government bonds offered a slightly positive and corporate bonds a minor negative rate of return.

In November, we fully sold the fund’s biggest investment outside the Baltics – the Bulgarian government bonds. While at the time of their issue and the acquisition of our position in summer 2014, the state’s reputation was still strongly associated with the financial crisis, for now, Bulgaria is close to becoming a member of the euro zone. The declined risk level brought along a notable price increase of bonds and thus, the rate of return of the investment rose slightly over 26% in three and a half years.

From new investments, the Citadel bank bonds were added to the portfolio. Likewise to the issue last winter, this time the biggest investors in the bank’s subordinated bond issue were also LHV’s pension funds. While the annual interest of bonds issued last December is 6.25%, this offer was at the interest level of 5.5% In addition, the fund made its last payment to Riigi Kinnisvara AS under the bond contract signed in summer. We will continue to work with several local companies and still hope to supplement the portfolios with bonds of local companies this 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 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund XL - The boldest choice

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 1,33000%

Information about the fund

Volume of the fund (as of 31.12.2017)135,326,985.83 €

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 31.12.2017

Biggest investments
EfTEN Kinnisvarafond4.75%
Luminor Bank 12/20194.43%
Riigi Kinnisvara 06/20274.29%
Latvia 09/20252.93%
East Capital Baltic Property Fund II2.85%
WisdomTree Japan Hedged Equity Fund2.58%
France 10/20222.46%
Amber Circle Funding 12/20222.28%
JP Morgan Chase 08/20212.25%
iShares STOXX Europe 600 Health Care2.23%
Current asset allocation
Money and deposits1.4%
Government bonds9.3%
Corporate bonds55.8%
Real estate11.9%
Shares21.6%
Regional distribution
Money and deposits1.4%
The Baltic states46.6%
Europe (excl. the Baltic states)29.0%
Asia7.5%
North America13.6%
Other2.0%

The result was supported by the rise of Roche stock

Kristo Oidermaa, Portfolio Manager

Once again, November appeared to be positive for the Japanese stock market, where the Tokyo Stock Exchange rose by 3.2% in local currency and by 2.2% measured in euros. On European stock markets, however, November was a month with a negative rate of return: the stock markets in Germany, France, Sweden, Finland as well as Great Britain were all in a state of decline. The level of stock index, including the 50 largest European companies, altogether dropped 2.8% by the end of the month.

In the Baltics, the strongest was the Riga stock market with a 3% increase, but also the Tallinn Stock Exchange showed a good 1.8% return in November. The Vilnius stock exchange index, on the contrary, remained in essence at the same level as October, moving by –0.1%.

The result of Pension Fund XL was supported by the stock of Swiss pharmaceutical company, Roche, which in November rose above 7%. The company published good results about late phase clinical tests of haemophilia as well as a cancer drug. Despite that, the European health sector’s index dropped by 5.8% during the month.

November passed without any bigger movements on the European bond markets. Government bonds offered a slightly positive and corporate bonds a minor negative rate of return.

In November, we fully sold the fund’s biggest investment outside the Baltics – the Bulgarian government bonds. While at the time of their issue and the acquisition of our position in summer 2014, the state’s reputation was still strongly associated with the financial crisis, for now, Bulgaria is close to becoming a member of the euro zone. The declined risk level brought along a notable price increase of bonds and thus, the rate of return of the investment rose slightly over 26% in three and a half years.

From new investments, the Citadel bank bonds were added to the portfolio. Likewise to the issue last winter, this time the biggest investors in the bank’s subordinated bond issue were also LHV’s pension funds. While the annual interest of bonds issued last December is 6.25%, this offer was at the interest level of 5.5% In addition, the fund made its last payment to Riigi Kinnisvara AS under the bond contract signed in 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 2017 the sum is EUR 175.94.

How can the funds be withdrawn from the second pillar?

See video

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

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

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

When up to EUR 9000 has been accumulated in the pension account, the money can be used with periodical payments from the pension fund. For this, an application must be filled in at a bank office or the online bank. In your application, notify the bank of the desired period of the payments and the total duration of the pension payments. How short the period can be is determined by the Funded Pensions Act and depends on the age of the pensioner. Unlike an insurance company, which pays you a pension for the rest of your life, payments from the pension fund are only made as long as there is money on your account. On the other hand, all of the assets in the fund belong to the recipient of the pension, and when they pass away, they are transferred to their heirs.

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

Money can be withdrawn from the 2nd pension pillar in a lump sum, when less than EUR 1800 have been accumulated in the pension fund.

Bequeathing

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

Taxes

An income tax of 20% applies to the payments from the pension fund. The income tax calculation is based on the tax exemption to the monthly income of a pensioner, which in 2017 is EUR 416.

LHV Pension Fund Indeks – Continuous investment

Suitable if

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

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

Rate of return

From the beginning / Current year / Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,39%

Information about the fund

Volume of the fund (as of 31.12.2017)7,456,855.22 €

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 31.12.2017

Biggest investments
iShares Global REIT ETF9.04%
Amundi Index FTSE EPRA Nareit Global UCITS ETF8.75%
db x-trackers MSCI World Index UCITS ETF7.62%
Vanguard Total World Stock ETF7.47%
iShares Core MSCI Emerging Markets ETF7.32%
BNP Paribas Easy FTSE EPRA/NAREIT Eurozone Capped7.28%
Vanguard FTSE All-World UCITS ETF7.13%
Vanguard FTSE Emerging Markets ETF7.08%
iShares Core MSCI World UCITS6.66%
db x-trackers MSCI USA Index UCITS ETF5.56%
Current asset allocation
Money and deposits1.4%
Real estate25.9%
Shares72.7%
Regional distribution
Money and deposits1.4%
Emerging Markets23.8%
Frontier Markets2.4%
Developed Markets72.4%

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

New investments in Estonia
Andres Viisemann, Head of LHV Pension Funds

November was a relatively quiet month for securities markets. Stock markets in the US and Japan recorded small rises, while European shares lost 2.1% of their value. The value of shares traded on the Tallinn Stock Exchange grew in November by 1.8%.

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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