Financial Services, Funds, Investments, Latvia, Pensioners

In the first quarter of this year, contributions to the private pensions totaled EUR 16.5 million, growing 11.6% year-on-year, including a 12.2% rise in contributions by individual participants of the pension plans and a 6.4% growth of contributions made by employers.

At the end of March 2018, the aggregate accumulated capital in private pension funds reached EUR 437.8 million, growing 0.8% from the beginning of the year.

The aggregate amount of private pension capital paid out to individuals in the first quarter of 2018 was EUR 6.1 million or 38% less than during the same period in 2017, with 92% of the capital paid out to individuals who had reached the retirement age.

The average yield of pension plans in the first three months of this year was minus 1.5%, with yields of individual plans ranging between minus 5.15 and zero.

The total number of participants of the private pension funds reached 287,491 people, up by nearly 1,000 or 0.3% from the end of 2017, accounting for 29.4% of Latvia’s economically active population.

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.