ESTONIA - Recovering equity markets have boosted Estonian pension plans but the return rates differed greatly among the six providers in the mandatory market.
Returns for the last 12 months stood at 0.2% while over the six months since April this year, the 19 funds in the market gained 13.77% on average, according to data released today by the Estonian pension information site Pensioni Keskus.
The funds, with varying risk profiles, are offered by Nordea, SEB, Swedbank (created by Swedish FöreningsSparbanken and the Baltic Hansabank in 2006), Sampo (owned by Danske Bank), Ergo (Part of Munich Re) and Estonian bank LHV, which proved to be the best over the last months.
Among the six conservative pension funds with no equity exposure the average return over the last six months stood at 8.08%, LHV’s two bond funds posted results of 15.58% and 14.05% respectively.
Similarly, the company’s progressive pension funds returned 28.13% (with emerging market equities) and 24.99% (with global equities).
However, in this category LHV’s second fund was beaten by Ergo’s which returned 25.02% while the market average for a pension fund portfolio with up to 50% in equities was 19.87%.
Among the balanced funds with up to 25% in equities, which posted an average of 13.34%, LHV was once again the best performer followed by SEB.
The worst performer in all three risk-profiles was Sampo pension with 0.51% for its conservative, 3.17% for the balanced and 7.66% for its progressive fund.
Assets in the market have increased to EEK 14.15bn (€904m) from just over EEK 11bn a year ago but in summer 2008 they had already surpassed the EEK 12.7bn mark.
In spring of this year the Estonian government had announced it will stop its contributions to the mandatory second pillar set up in 2002 because of the financial crisis. (See earlier IPE article: Estonian gov’t takes contribution holiday)
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