Financial Services, Funds, Investments, Latvia, Pensioners
International Internet Magazine. Baltic States news & analytics
Thursday, 28.03.2024, 18:15
Capital of Latvia's private pension funds grows 14.2% in 2017
The number of participants of the private pension funds rose by 5.2% or 14,270 people last year. At the end of 2017, there were 286,507 people saving money in private pension funds.
The contributions to the private pension funds increased by EUR 13.847 million and 2,161 participants joined the funds in December 2017, which was the steepest monthly growth last year.
The average yield rate of the private pension funds in 2017 since the beginning of the year was 3.67%. Balanced pension funds that follow conservative investment policies showed a yield of 2.41% on average, while the average yield of active pension plans was 5.69%.
The only conservative pension plan had a 0.25% yield.
There are currently six private pension funds operating in Latvia (five open pension funds and one closed pension fund), offering 18 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.