2012-02-28
In 2011, the assets of 3rd pillar pension funds declined, however, the number of fund participants grew
According to the data of the Bank of Lithuania, the assets of 3rd pillar pension funds (PFs) declined by 5.36 per cent in 2011, compared to 2010, to LTL 93.92 million, however, the number of people accumulating their pensions in voluntary funds increased by 10.44 per cent to 26.43 thousands. Their number was the highest since the beginning of operation of 3rd pillar pension funds in Lithuania.
Owing mostly to concern and corrections in the global markets, in 2011 the unit value of additional voluntary accumulation PFs operating in Lithuania declined by 9.0 per cent on average. Only one of nine funds operated profitably: its unit value increased over the year by 1.9 per cent. The unit value of other 3rd pillar PFs went down by 2.3 – 22.4 percent. The unit value of the risky funds – those investing in stocks – decreased the most.
At the end of last year, more optimistic trends were observed. In the fourth quarter alone, the unit value of PFs operating in the market increased on average by 3.5 per cent. Unit value of six funds went up by 1.8 – 7.2 per cent, whereas that of three funds declined by 0.2 – 0.3 per cent.
The analysis of the Bank of Lithuania shows that last year the largest share of the total assets of 3rd pillar PFs was invested in Luxembourg (40.05%), Lithuania (21.36%), Ireland (12.26%) and Germany (4.69%)
In the recent two years, the number of participants of 3rd pillar pensions funds increased rapidly: last year their number grew by 2.7 thousands and this year by 2.5 thousands. Such increase established a new record.
“The growth in popularity of additional pension accumulation may be associated with both a gradual rise of the average wage and reduced transfers to 2nd pillar pension funds. However, it is most likely that an increasing number of people are searching for alternatives to the state pension system. These searches are also encouraged by tax incentives applied to private pension accumulation”, said Mr. Vilius Šapoka, Director of the Financial Services and Markets Supervision Department of the Supervision Service of the Bank of Lithuania.
According to him, despite the growth in recent years, the popularity of private pension accumulation in Lithuania, compared to the Western European states, is still weak.