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MUTUAL AND PENSIONFUNDS: LITHUANIAN CASE
Taurimas Valys
PhD candidate
Vilnius university
International School of Law and BusinessVilnius26.11. 2009
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AGENDA
MUTUAL FUNDS (UNDER UCITSREGULATION / HARMONIZED ANDSPECIAL FUNDS);
PENSION FUNDS (II PILLAR PENSIONFUNDS VERSUSSOCIAL SECURITYSYSTEM "ALTERNATIVES"; III PILLAR AND
OTHER VOLUNTARY PENSION FUNDS)
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Fund types
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Investors risks
Expenses do not depend on rate of return. Investor does not have any control over
investments. Investor cannot control assets market
value in real time.
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Mutual funds:
Harmonized Vs. Special
Publicity
Subscription
Risk levelDiversification requirements Liquidity level
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Baltic market
Equity funds (106) Fixed Income funds (31) Fund of funds (17) Balanced funds (10) Money Market funds (6) Real Estate funds (3)
Liquidity fund (3) Alternative funds (2)
http://www.nasdaqomxbaltic.com/market/?pg=funds&fund1=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund3=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund6=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund2=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund4=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund7=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund5=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund8=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund8=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund5=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund7=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund4=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund2=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund6=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund3=1http://www.nasdaqomxbaltic.com/market/?pg=funds&fund1=1 -
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Management companies(Licensed in Lithuania)
1. DanskeCapitalinvesticijvaldymas2. DnBNORDinvesticijvaldymas3. Finasta Asset Management4. Investicijportfelivaldymas5. JTinvesticij valdymas(licencerevoked)6. Lords LB Asset Management7. MP Pension Funds Baltic8. Parexinvesticijvaldymas9. Prudentis10. SEBInvesticijvaldymas
11. SindicatumCapital International12. SNORAS Asset Management13. Swedbankinvesticijvaldymas14. kiobankoinvesticijvaldymas
http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/finasta-asset-management/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/investiciju-portfeliu-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/investiciju-portfeliu-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/investiciju-portfeliu-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/lords-lb-asset-management/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/mp-pension-funds-baltic/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/parex-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/parex-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/parex-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/prudentis/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/seb-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/seb-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/seb-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/sindicatum-capital-international/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/sindicatum-capital-international/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/snoras-asset-management/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/swedbank-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/swedbank-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/swedbank-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ukio-banko-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/swedbank-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/swedbank-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/swedbank-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/snoras-asset-management/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/sindicatum-capital-international/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/sindicatum-capital-international/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/seb-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/seb-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/seb-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/prudentis/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/parex-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/parex-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/parex-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/mp-pension-funds-baltic/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/lords-lb-asset-management/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/jt-investiciju-valdymas-licence-revoked/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/investiciju-portfeliu-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/investiciju-portfeliu-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/investiciju-portfeliu-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/finasta-asset-management/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/dnb-nord-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/danske-capital-investiciju-valdymas/http://www.vpk.lt/en/market-participants/management-companies/licensed-in-lithuania/ 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Legislation
Law on Securities Law on Companies Law on Markets in Financial Instruments Law on Financial Institutions Law on Collective Investment Undertakings Law on the Privatization of State-Owned and Municipal Property Law on Insurance of Deposits and Liabilities to Investors
Law on the Accumulation of Pensions Law on the Supplementary Voluntary Accumulation of Pensions
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Achievements: Participants
Performance of participants number 31 12 2003 440 000 31 12 2004 556 000 31 12 2005 685 000 31 12 2006 784 000 31 12 2007 880 000 31 12 2008 - 957 000
Distribution by gender
51 % - Male, 49 % - Female Distribution by age Up to 30 years - 30 %, 30-50 years - 61 %, above 50
years - 9 %
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Assets in thousands ofmillions of LTL
31 12 2004 127,4
31 12 2005 406,1
31 12 2006 904,9
31 12 2007 1688,2 31 12 2008 - 2223,8
(Exchange rate since February 2002: 1 EUR
3,4528 LTL)
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Transfer rate which comes to pension funds from The State Social
Insurance Fund Board under the Ministry of Social Security and Labor
2009 I half. 3 % 2009 II half. 2 %
2010 m. 2 %
2011 m. 5,5 % 2012 2014 m. 6 % (?)
2015 m. and later 5,5 %
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Achievements: Serviceproviders
1. Swedbank ( former Hansa, Swedish BankingGroup ) 4 funds
2. Finasta ( Local Financial Services Group) 4 fundsand 4 acquired from PZU Lietuva
3. MP Pension Funds Baltic (Icelandic Financial
Group) 3 funds4. DnB Nord (Scandinavian German Banking group)
3 funds5. Parex ( Regional Financial group with HQ in
Latvia) 2 funds6. Danske Capital ( Danish Banking Group) 3 funds7. SEB ( Swedish Banking Group) 3 funds8. Aviva ( UK Insurance Group) 3 funds9. Ergo ( German Insurance Group) 2 funds
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Achievements: Serviceproviders (cont.)
Market is heavily dominated by thesubsidiaries of Scandinavian Bankinggroups it covers more 75 percent of
total market Small market players loosing market
share due to the shortage of efficient
non banking distribution channels
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World Bank I part - timing
Timing was right due to the maindemographical trends
System will mature around 2050, when 80%of insured will be entitled to receive pensionsfrom two
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World Bank II part model
Efficiency of model was proved by results asmore than 70 of working population joinedthe system
System is very efficient in terms of
institutional structure But system is quite costly from the participant
point of view due the total assetsaccumulated yet
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Conclusion
The main problem is financing of II pillarcontributions
Fiscal policies sustainability importance
Position of European Commissionshould be clarified
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Q & A
T i V l (t i @ h )