Financial Services, Funds, Investments, Latvia, Pensioners

The number of participants of the private pension funds rose by 2.5% or 6,688 people in the first six months of 2017. At the end of June 2017, there were 278,925 people saving money in private pension funds.

The average yield rate of the private pension funds since the beginning of this year is 1.75%. Balanced pension funds that follow conservative investment policies showed a yield of 1.28% on average, while the average yield of active pension plans was 2.65%. The only conservative pension plan had a negative yield of minus 0.65% in January-June this year.

There are currently six private pension funds operating in Latvia (five open pension funds and one closed pension fund), offering 17 various pension plans which differ by their investment strategy.

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 by employees is invested in the finance sector, ensuring them bigger pensions in the future. The third pillar is operated by private pension funds based on voluntary contributions.