Analytics, Banks, Financial Services, Funds, Good for Business, Latvia, Pensioners

All plans in Latvia's government-funded pension scheme showed positive yield at the end of September 2016, according to publicly available information on the government-funded pension plans.

As at September 30, 2016, the annual yield of the eight active pension plans was in the range from 2.88% to 6.69%, the the annual yield of eight conservative plans was in the range from 1.09% to 5.72% and the annual yield of four balanced plans ranged from 2.99% to 5.21%.

Among the active pension plans, INVL Ekstra 16+, the pension plan managed by INVL Asset Management, showed the highest yield, or 6.69%. Gauja, the active pension plan managed by Norvik Ieguldijumu Parvaldes Sabiedriba, followed with a 5.3% annual yield, and DNB Aktivais Ieguldijumu Plans, managed by DNB Asset Management, was third with a 4.23% annual yield.

Swedbank's active pension plan Dinamika remained the most popular active pension plan at the end of September with 412,588 participants (416,992 participants at the end of 2015). The plan’s yield is 2.88 %, which is the lowest yield among active pension plans.

The second most popular active plan was SEB Aktivais Plans managed by SEB Wealth Management with 132,074 participants (131,957 at the end of 2015), and the yiel of this plan was 3.96 %, which is the fourth highest yield among active plans. The third most popular active plan with 131,878 participants (128,203 in 2015) was CBL Aktivais Ieguldijumu Plans managed by CBL Asset Management with an annual yield of 3.15 % or the second lowest yield among active plans.

The highest yield among eight conservative plans was for Daugava plan managed by Norvik Ieguldijumu Parvaldes Sabiedriba or 5.72%, while the lowest yield was for Stabilitate managed by Swedbank Ieguldijumu Parvaldes Sabiedriba or 1.09 %, which is still the most popular conservative pension plan with 114,258 participants (110,587 in 2015).

Among the four balanced pension plans, INVL Komforts 47+ managed by INVL Asset Management showed the highest yield of 5.21 %, while DNB Sabalansetais Ieguldijumu Plans managed by DNB Asset Management had the lowest yield of 2.99 %.

At the end of September 2016, there were seven companies in Latvia managing the assets of the government-funded pensionscheme, offering a total of 20 pension plans, including eight conservative pension plans, four balanced pension plans and eight active pension plans.

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.