The Financial Supervision Authority (FSA) in Estonia has fined Luminor Pensions Estonia €170,000 for disclosing incorrect information.
The FSA says Luminor Pensions Estonia did not appropriately disclose costs as part of its current rates of fees for 2018, and fined the company as a result.
"Misleading the ordinary investor and the public by a professional market participant on the securities market is a grave violation," FSA Kilvar Kessler board chair said in a press release, BNS reports.
"All the more since this affects a very large number of people in the system of the mandatory second pillar," he added.
Under current law, pension fund managers are required to publish within the key information document of each pension fund the rate of current fees, setting out all charges and expenses paid at the expense of unit-holders during the past calendar year.
Luminor Pensions Estonia invests a significant portion of its fund assets in other investment funds, whose must be taken into consideration when publishing current rates of fees related to the funds, BNS reports.
Kilvar Kessler added that the disclosure of incorrect information about fees may mislead unit-holders in their choices and create a competitive advantage for the party that published incorrect information.
Pursuant to the Investment Funds Act, disclosure of incorrect, misleading or untimely information concerning a fund, if committed by a legal person, is punishable by a fine of up to €400,000, according to BNS.
Luminor is an Estonian bank. The coalition put a bill before the Riigikogu to make the so-called second pillar of the Estonian pensions system, referring to employee contributions, optional where it had been mandatory for most wage-earners since 2010. However, it was rejected by President Kersti Kaljulaid, part of whose constitutional role is to sign legislation into being. The case will be put before the Riigikogu in the fall.
Managed pensions funds such as Luminor's make up the bulk of the second pillar.
Editor: Andrew Whyte