2015-03-05
Pension funds: more people accumulating, the assets of pension fund and investment fund participants growing
The number of 2nd and 3rd pillar pension fund (PF) participants grew last year and was record high at the end of 2014. The year was also successful for collective investment undertakings (CIUs) publicly distributed in Lithuania, i.e. investment funds: their assets grew driven by successful investing activities and new investments attracted.
Those who accumulate in 2nd pillar pension funds grew by nearly 40 thousand (3.6%) in number over a year; at the end of 2014, a total of 1,156.6 thousand participants accumulated their pensions in these funds. This has been the largest number of 2nd pillar PF participants since the start of the pension reform.
“In recent years, the number of 2nd pillar pension fund participants has been growing moderately, basically on account of young people entering the labour market, who chose to accumulate in private funds,” says Audrius Šilgalis, senior specialist of the Financial Services and Markets Analysis Division at the Bank of Lithuania.
The assets of 2nd pillar PFs expanded by 18.45 per cent over a year — to EUR 1,867.69 million (LTL 6,448.77 million), the average return was 7.8 per cent. The number of participants of supplementary voluntary accumulation, i.e. 3rd pillar, PFs last year increased by 16.6 per cent — to 39,933, the assets managed — by 26.05 per cent, to EUR 47.58 (LTL 164.30 million), while the average return was 7.3 percent.
The year 2014 also saw an increase in the assets of the investment funds publicly distributed in Lithuania. At the end of the last year, they amounted to EUR 597.01 million (LTL 2,061.36 million), growing by 5.11 per cent over a year. The growth in the assets managed in 2014 entailed from successful investing activities as well as from the fact that more units of funds had been distributed than redeemed. However, the number of pension fund participants declined by 8.57 per cent in the respective period — to 59,147.
CIUs registered abroad and publicly distributed in Lithuania are still enjoying greater popularity, but the gap between them and Lithuanian CIUs in terms of assets managed has slightly narrowed because of stronger growth in the assets of the funds registered in Lithuania. As of 31 December 2014, the investment units of 317 funds registered abroad were distributed in Lithuania. The value of the units of foreign CIUs distributed in Lithuania is EUR 336.32 million (LTL 1,161.26 million). The assets managed by these CIUs increased by 3.38 per cent in value over 2014.
At the end of the last year, 28 CIUs registered in Lithuania were engaged in investing activities, with 15,313 participants having invested in them, while the assets of the funds amounted to EUR 260.69 million (LTL 900.11 million). The assets managed by funds grew by 7.42 per cent over a year; the number of their participants contracted by 14.51 per cent though.
The 2014 Review of Lithuania's 2nd and 3rd Pillar Pension Funds and of the Market of Collective Investment Undertakings (in Lithuanian) is published on the website of the Bank of Lithuania.