LHV, Two Foreign Banks Lead in Pension Fund Performance

Photo: Postimees/Scanpix
1/2/2014 3:59 PM
Category: Economy

Nordea Bank's second pillar pension fund "A Pluss" performed the best in Estonia last year, increasing 9.49 percent, while SEB's "Conservative Pension Fund" was at the bottom of the list shedding 2.51 percent.

Out of the 23 pension funds with the six biggest organizations, only two were in the red at the end of the year. Nordea's "C" fund was the other one, recording a 0.94 percent loss, uudised.err.ee reported today.

Ergo's “2P3” fund was the second most successful pension fund with a 7.8 percent growth, followed by the “XL” fund managed by LHV, which recorded a 6.6 percent growth over the previous 12 months.

The Estonian bank LHV tops the three-year performance table, with its different funds showing growth between 8.18 and 11.24 percent. SEB again was last, with -1.49 to 4.32 percent.

Second pillar pension fund performance over the last three years:
Ergo (three funds): -0.29 to 7.74 percent
Danske (three): 6.46 to 8.43 percent
LHV (five): 8.18 to 11.24 percent
Nordea (four): 7.70 to 10.87 percent
SEB (four): -1.49 to 4.32 percent
Swedbank: 8.10 to 9.56 percent

Estonia's pension system has three pillars: the first pillar is the state pension, available to everyone who has worked in the country for at least 15 years and who has reached retirement age. The current minimum state pension is 134.10 euros and the average pension is 313 euros.

The second pillar is mandatory for everyone born after 1982. Employers hand over two percent of their pre-tax salaries to private pension funds and the state adds another four percent. People born before 1983 may join the fund.

The third pillar allows voluntary savings, with the state helping by giving limited tax incentives.


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