Third level pension plan deposit volumes reach new record value

Residents’ interest for pension savings remains high. The volume of deposits made to private pension funds in the first three months of 2018 has reached a new historic peak: a total of EUR 16.5 million has been paid to 3rd level pension accounts, which is 11.6% more when compared to the same period of 2017, as reported by Finance and Capital Market Commission.

In Q1 2018, EUR 16.5 million was deposited on 3rd level pension plans, which is 11.6% more than a year ago. Pension plan participants’ deposits have also increased 12.2%. Deposits of employers have increased 6.4%. The total capital saved up on pension plans reached EUR 437.8 million at the end of March. In Q1, this amount grew 0.8%, as reported by FCMC.

EUR 6.1 million was paid from pension plan capital in Q1. This is 38% less when compared to the same period of last year. 92% of this amount was paid to pension plan participants who reached retirement age.

The average pension plan yield in Q1 2018 was 1.5%. For individual plans, however, it ranged between 5.15% and 0%.

At the end of March, half of the pension plan portfolio came from deposit fund certificates. 44% of them focused on deposits in fixed income tools, and 48% of them – on deposits in shares or indexes. The second largest addition to the portfolio came from deposits in bonds and other fixed-income securities (38%). 70% of deposits went to state-released bonds.

At the end of March, the volume of deposits in Latvia declined by EUR 4.3%, reaching EUR 90.2 million. The proportion of deposits in the general portfolio declined from 21.7% to 20.3%, as reported by FCMC.

The commission also reports that the total number of private pension plans has increased by almost a thousand over the course of the quarter, reaching 287,491 – 29.4% of Latvia’s economically active residents.

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