Daily magazine about Latvia www.latviannews.lv
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Nicolas de Chamfort
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Employers become more open to 3rd level pension contributions

Photo: pixabay.com
Employers in Latvia have begun making more active contributions to 3rd level pension plans. Residents’ interest towards crating pension savings continues growing, too. Compared to the period of last year, the size of contributions to private pension funds has increased 10% in the first nine months of 2018.

EUR 49.5 million was paid to 3rd level pension funds in nine months, which is 10.2% more than in the same period of last year. Additionally, individual contributions have grown 7.4% and employers’ contributions have grown 20%. At the end of September, capital savings on pension funds reached EUR 460.6 million, growing 6% since the beginning of the year, as reported by Finance and Capital Market Committee.

EUR 18.1 million were paid from pension plans in the nine months, which is 21% less than a year prior.

Following the increase of stock prices on European, American and world stock markets, results of pension plans continued improving in Q3 in comparison to the previous two quarters. Average pensions plan yield was -0.7% in nine months of 2018. For individual plans it ranged between -2.3% and +2.1%.

At the end of September, 55% of pension plan portfolios consisted of fund certificates, 41% of which focused on deposits in fixed income instruments and 51% in investments in stocks or stock funds. The second largest share in the portfolio belonged to deposits in bonds and other fixed income securities (39%).

The volume of contributions in Latvia has declined EUR 11.5 million since the beginning of the year, reaching EUR 83 million at the end of September. The share of these deposits in the total portfolio has declined from 21.7% to 18%.


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