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The 2nd pillar pension

The 2nd pillar pension (the State funded pension scheme) in Latvia came into effect on July 1, 2001. It stipulates that a part of social insurance contributions (social tax) is collected and invested in the financial and capital market, providing each participant of this level with the possibility of obtaining a higher pension in old age.

 

Anyone, who was born after July 1, 1951 can become a participant of the 2nd pillar pension. If you were born in the time period from July 2, 1951 to July 1, 1971, then you can voluntary join a 2nd pillar pension. If you were born after 1st July, 1971, then participation in the 2nd pillar pension is mandatory.

 

The 2nd pillar pension deposits are executed from social insurance contributions. The total amount of social insurance contributions, which is sent to the pension capital, is 20% of the socially insured person's income, which are distributed in 2017 between the first and second levels of the pillar pension as follows: 14% to the first level and 6% to the second level.

 

The State Social Insurance Agency registers the funds directed to the 2nd pillar pension at the personal account of each of the 2nd pillar pension member and transfers them to the selected pillar pension plan. Supervision on 2nd pillar pension activity is provided by the State Social Insurance Agency and the Financial and Capital Market Commission. The 2nd pillar pension accumulated funds can be obtained upon reaching the pension age set by the State.

 

The Bank's partner "INVL Asset Management" IPAS offers the following investment plans of the State funded pension scheme (2nd pillar pension):

 

Pension plan "INVL Konservatīvais 58+" is a conservative investment strategy - a moderate, but steady capital growth

This pension plan funds are invested into financial instruments with fixed income - states and enterprises debt securities, as well as the deposits of credit institutions and investment funds shares

We recommend you to choose this plan if you are older than 58 years

In 2016: 2,16%*

 

Pension plan "INVL Komforts 47+" is a balanced investment strategy - a balance between risk and stability

Pension plan assets are invested generally in bonds and deposits. Up to 25% of the assets can be invested in shares and investment funds. This investment policy allows to increase the potential profit for a longer time period

We recommend you to choose this plan if you are at the age between 47 and 57

In 2016: 3,76%*

 

Pension plan "INVL Ekstra 16+" is an active investment strategy - opportunity to earn more at a higher investment risk

Up to 50% of the assets can be invested in shares and investment funds. Deposits into investment funds make it possible to use the experience of leading managers in the financial markets and additional ways to reduce the risk, that makes it possible to achieve a greater profit potential for a longer time period

We recommend you to choose this, if you are from 16 till 46 years old

In 2016: 4,89%*

* One year profitability, information on 30.12.2016, source: www.manapensija.lv

 

More information about the 2nd pillar plans managed by IPAS "INVL Asset Management" can be found on the homepage: http://www.invl.com/

 

Advantages of the 2nd pillar pension:

 

  • funds are accumulated exactly for your pension
  • there is a possibility to choose the most suitable asset manager and investment plan
  • no additional costs
  • funds are invested into financial and capital market, ensuring a higher pension in old age
  • there is a strict State supervision, so no need to worry about the funds safety
  • there is a possibility to change the asset manager and investment plan every year

 

You can apply for the 2nd pillar pension in any of the AS "Meridian Trade Bank"  Customer Service Centers in Latvia.

 

Selection or change of the 2nd pillar pension is free.

 


About "INVL Asset Management"

 

IPAS "INVL AssetManagement" operates in the market of Latvia since the 2002, managing the pension funds of 2-nd and 3-rd tiers. More than 49 000 people have entrusted their pension savings to this company and assets level of the 2nd pillar pension under the control of "INVL AssetManagement" exceeds 55 million euro.* The professionalism of this company is supported by the fact that "INVL AssetManagement" pension plans have the highest rates of return on the market, and in 2011 they were the only managers who have gained the positive returns from all tier 2 pension plan strategies.

 

More info on the homepage http://www.invl.com/

 

*Information on 30.12.2016. Source: www.manapensija.lv

 

There are three levels of the pension system in Latvia:

 

1st level of the pension system - State unfunded pension scheme

Scheme, which includes all people who pay social insurance contributions, creating savings for their retirement and caring about today's pensioners

2nd level of the pension system - State funded pension scheme

The 2nd pillar pension scheme provides an opportunity to create additional savings via investment of part of social security contributions in the financial and capital markets - securities and bank deposits

3rd level of the pension system - private voluntary pension scheme

By making contributions to the Private Pension Fund the saving created will serve as an addition to the State-guaranteed pension

 
Information
AS "Meridian Trade Bank" Head office
57 Elizabetes Str., Riga, LV-1772, Latvia
Ph.: +371 67019393
E-mail: info@mtbank.eu
Skype: mtb_info
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