Analytics, Financial Services, Funds, Investments, Latvia, Legislation, Pensioners

In the first quarter of this year conservative and balanced plans with securities dominating in their investments structure showed better results. The three-month yield of conservative plans ranged from 0.4% to 1.4%, while the yield of balanced plans was between minus 0.4% and plus 0.5%. All active plans closed the first quarter of this year with a negative yield, ranging between minus 1.8% and minus 0.2%. FCMC said that these results are good, considering that European stock index STOXX Europe 600 Index lost 7.7% of its value.

At the end of March, securities accounted for 44.5% of the aggregate investment plan portfolio, followed by investment funds certificate for 32%.

Investments made in Latvia dropped by 0.1% from late 2015 to slightly over EUR 1 billion or 43.5% of total investments. EUR 444.4 million were invested in securities issued by the government, EUR 76.2 million in debt securities of companies, EUR 2.7 million in stocks, EUR 23.6 million in investment funds, EUR 5.9 million in risk capital markets, and EUR 495.7 million were placed in credit institutions.

By the end of March, the government-funded pension scheme had 1,257,343 participants. As many as 58,200 participants switched their investment plans in the first quarter, which is by 8% less than in the respective period last year.

Latvia has a three-pillar pension system. The first- pillar pensions are paid to the existing pensioners from the social contributions made to the state budget. The second or government-funded pension level implies that part of the social contributions is invested in the finance sector, ensuring bigger pensions in the future. The third pillar is operated by private pension funds based on voluntary contributions.