Financial Services, Funds, Investments, Lithuania

The markets were more nervous now hence it was difficult to make any forecasts for 2016, Sarunas Rugzys said, noting, however, that saving for retirement was a long-term activity and, therefore, it was not worthwhile to place greater emphasis on the results of individual years.

“Last year was rather volatile, intensive, not entirely calm… In any case, it’s not worthwhile to draw any special conclusions from that, whether it’s a positive or a negative change one year, it doesn’t mean anything from a long-term perspective and performance. And performance is not bad – even with the crisis of 2008 taken into account, we record growth, which is probably the main thing,” he told BNS.

Pension funds had been growing for nearly seven years hence it was natural to anticipate a correction in some year, Ruzgys said.

“It’s difficult to tell now whether it will happen in 2016 or in some other year, but that’s unavoidable. However, it won’t be a tragedy if the result for one particular year is somewhat negative. The same is true about positive years – that it’s not something to boast about excessively. Of course, it’s better to see positive results but this market fluctuates and that’s normal, that’s the rules of the game,” he said.

According to the data made available by the central Bank of Lithuania, the value of units of the second-pillar pension funds last year rose by 3.61% on average. The average annual return of those funds totaled 4.65% in the past five years and 3.56% in the past decade. The average annual inflation over the past ten years was 3.21%.

The total value of investment portfolios of the second-pillar pension funds amounted to 2.118 billion euros at the end of 2015, a rise of 13.5%, or 251.98 million euros, from the end of 2014.

Twenty-one second-pillar pension funds with 1.21 million members saving for retirement (up 4.3 y/y) operated in Lithuania as of Dec. 31, 2015.