News

Last year, the choices and distribution of those who subscribed to funded pensions were similar to those of the previous periods, while the volume of supplementary funded pension funds (3rd pillar) made a record increase of MEEK 311 (totalling MEEK 763 as of 31 December 2006).

In addition to the volume of funds, the number of supplementary funded pension customers also increased. The number of subscribers to Hansa Pension Fund V3 doubled in 2006 (a total of 11 000 subscribers). Hansa Pension Fund V2 achieved the second largest growth in terms of the number of new unit holders (from 2751 to 5000 subscribers).

“While the number of subscribers to mandatory funded pensions has stabilised, the interest of investors in supplementary funded pensions grew significantly over the past year,” noted Kristel Johanson, CEO of the Estonian CSD. “This shows that people have more savings that can be nurtured in funds to make retirement more secure. Before subscribing, one should compare the yields and investment policies of, as well as the fees charged by, the different funds. It is not worth being misled by the extra bonuses offered in advertising campaigns,” she said.

The number of subscribers to mandatory funded pensions (2nd pillar) increased to 519 726 by the end of 2006, compared to 481 271 at the end of 2005. The total volume of mandatory funded pension funds increased from BEEK 4.7 to BEEK 7.4 during last year.

The EPI index that reflects the average yield of funded pensions funds rose from 135.56 to 145.67 points (7% growth) over the year. The rise was somewhat more modest compared to previous years (2005: 13%, 2004: 10%), owing to the general downward trend of the world’s securities markets at the beginning of 2006.

The average income of subscribers to funded pension increased to EEK 8900 by the end of 2006 (6% increase); 85% of subscribers receive wages.

With the turn of the year, persons who so wished were able to begin making contributions in a new mandatory pension fund and transfer their earlier pension savings to the new fund as well.

A total of 35 129 investors transferred their contributions to a new fund last year. The SEB Ühispank Pension Fund Progressive won the most new customers as a result of these transfers; this was the choice of nearly 13 000 investors who had earlier made contributions to other funds.

8152 investors converted their units. Again, the most popular conversion was for the units of the SEB Ühispank Pension Fund Progressive. 3585 subscribers converted their units for this fund. The mandatory pension fund Sampo Pension 50 followed with 1959 conversions.

The mandatory pension fund Hansa Pension Fund K3 has the largest number of investors (174 953 at the beginning of 2006). The SEB Ühispank Pension Fund Progressive is second with 133 787 investors. The LHV Quality Bonds Pension Fund has the smallest number of investors (764).

Detailed information on funded pension is available at the website of the Pension Centre www.pensionikeskus.ee. The Estonian CSD keeps record of subscribers to funded pensions.