LITHUANIA - The 28 funds in the Lithuanian second pillar posted an average return of 12.79% for the first eight months of 2009 after 19.9% losses in the previous year.

The funds that performed the best in the period between January and end of August are the four funds in the system investing between 70 and 100% in equities. They returned 19.25%, according to data published on the Lithuanian social affairs ministry website.

As an exception to the majority of other CEE pension systems the second pillar in Lithuania is voluntary and pension funds are free to invest as much as they want abroad. (See earlier IPE article: Lithuanian second pillar results boosted by allocating globally)

The nine conservative funds with virtually no equity exposure returned 6.01% for the first eight months, the four balanced funds 9.79%.

The second best performers were the eleven active funds with 30 to 70% in equities returned 15.97%.

Last year the picture was reversed with the riskiest funds losing 47.31% and 27.6%.The balanced funds lost 12.04% while the conservative pension funds managed a positive return of 2.95%.

Among the pension providers Aviva and Lithuanian asset manager Invalda are among the best performers.

Other providers in the market are Danske Capital, DnB Nord, Ergo, Lithuanian asset manager Parex, MP Pension funds Baltic, SEB and Swedbank.

Assets in the pension system which started collecting in 2004 stood at LTL2.93bn (€850m) at the end of August.

In January of this year the Lithuanian parliament voted in favour of a cut in allowed contributions to the second pillar from 5.5% to 3% for the next years in order to stabilise the income of the country’s state social security. (See earlier IPE article: Lithuania overrides veto on contribution cut)

 

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