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Funds fees

Three types of fees are charged on the pension funds: management fee, issue fee and redemption fee.

Explanation of the Funds Fees

The management fee is a fee paid to the fund management company for managing a pension fund. The management fee is deducted from the market value of the assets of the fund daily and the net asset value of a unit or the value of the investment made by the owner of the unit into the pension fund is decreased by it.

The rate of the management fee and the procedure for its calculation are established in the terms and conditions of the pension fund. The rate of the management fee is expressed as a percentage of the market value of the assets of the fund.

Example: if the rate of the management fee is, based on a 365-day year, 2 percent, the owner of a unit of the pension fund must pay monthly approximately 0.167% (2/12) of the market value of the assets of the pension fund to the fund management company. In a situation, where the investment value of the owner of the unit is for example €10,000, the owner of the unit must pay to the management company €16.70 each month. The management fee to be paid will increase or decrease according to the growth or fall of the value of the investment.

The terms and conditions of a fund may provide a procedure according to which the owners of the units are obliged to pay a unit issue fee upon acquiring units of a pension fund. The unit issue fee is subject to payment to the management company from the account of the owner of the unit who acquired the unit. The issue fee is established as a percentage of the net value of a unit. The rate of the issue fee and the procedure for its calculation are established in the terms and conditions of the pension fund.

NB! Pursuant to the Investment Funds Act, fund managers are not allowed to charge unit issue fee upon the issue of the units of the mandatory funded pension.

The redemption fee is charged upon the resale of units to the fund, it is subject to payment to the fund manager from the account of the owner of the unit. The redemption fee is also established as a percentage of the net value of a unit. The rate of the fee and the procedure for its calculation are established in the terms and conditions of the pension fund.

Read more: Mandatory pension funds