INVL Asset Management, one of Lithuania’s leading asset management companies, is expanding the options for supplementary pension accumulation. On 14 May the Bank of Lithuania approved updated rules for the supplementary voluntary accumulation (3rd pillar) pension funds which the company operates. Based on those rules, in light of people’s differing savings needs, effective 14 June INVL Asset Management will offer the possibility of accumulating in two types of 3rd pillar pension funds.
“Today it’s obvious that to ensure a dignified old age, you have to save for it additionally. That’s made possible by 3rd pillar pension funds, where residents of the country can accumulate with no restriction on the number of funds or companies, transferring a chosen amount to them, and accumulating in these funds brings tax benefits. This is a relevant option, though one that’s not yet well enough known, so we seek to simplify it even more,” said Dr Dalia Kolmatsui, Head of Pension Funds & Retail at INVL Asset Management.
She said that in introducing the new-type pension funds INVL Bold, INVL Prudent and INVL Stable, the company is aiming at greater flexibility for saving in the 3rd pillar. “We want to stress that these funds will make it possible to save ‘here and now’, allocating even minimal amounts for that and whenever it’s convenient for each person. We also want the process of accumulating to be even more accessible, so no contribution fee will apply for these funds,” Dr Kolmatsui said.
It is often thought, she noted, that 3rd pillar pension funds are only for accumulating large amounts and that they also require you to commit to accumulate constantly. “We want to put an end to that myth and stress that this is an extremely flexible way to accumulate which, for that reason, is accessible for most people,” said Dr. Kolmatsui.
The rules for the new type of pension funds take effect as of 14 June, and INVL Asset Management’s palette of 3rd pillar pension funds will include INVL Bold (invests in stocks; until now known as the INVL III Equity fund), INVL Prudent (as of now to allocate a third of assets each to stocks, bonds and real estate; until now known as the Swedbank Supplementary Pension Fund), and INVL Stable (invests in bonds; until now known as INVL Stabilo III 58+).
Settlements for the new-type funds will be simplified under the updated rules: contribution and performance fees will no longer apply, while the management fee will be 1.5% for the INVL Bold and INVL Prudent funds, and 1% for the INVL Stable fund.
The INVL Extremo III 16+ and INVL Medio III 47+ pension funds will continue to operate, as will the INVL Stabilo III 58+ fund (which will also operate under the name INVL Stable). They are more suited to people who want to accumulate according to the lifecycle principle, regularly paying in contributions. While the rules of the INVL Extremo III 16+ and INVL Medio III 47+ funds have been amended to add a minimal entry fee, these funds will continue to have the smallest management fee in their asset classes, at 0.8%. The names of these funds indicate the age at which accumulating in them is recommended.
INVL Asset Management operates five 3rd pillar and four 2nd pillar pension funds. As of the end of April this year, a total of 136 000 participants were accumulating in them, including 8 600 in 3rd pillar pension funds. As of the same date, the company’s pension funds had assets under management of 359.5 million euros, of which 23.6 million euros were in 3rd pillar pension funds.
INVL Asset Management is part of the Invalda INVL group whose companies manage pension and mutual funds, alternative investments, private equity assets, investment portfolios and other financial instruments. Over 190 000 clients in Lithuania and Latvia and international investors have entrusted the group’s companies with more than 600 million euros of assets.
INVL and Šiaulių bankas merged their retail services as of 1 December 2023.
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INVL and Šiaulių bankas merged their retail services as of 1 December 2023.