pension and mutual funds in lithuania. seminar 09 11 25

8/14/2019 Pension and Mutual Funds in Lithuania. Seminar 09 11 25

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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 )

pension and mutual funds in lithuania. seminar 09 11 25

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