Second pension pillar assets are growing steadily in the Baltic States.

SEB’s Baltic Household Outlook revealed that assets in the second pension pillar are growing rapidly, although households should accumulate additional assets to ensure a secure retirement.

In each of the Baltic States, second pension pillar assets have continued to grow. At the end of June, the total amount of assets was almost EUR 7 billion – EUR 2.4 billion in Estonia, EUR 2.2 billion in Latvia and EUR 2 billion in Lithuania. Starting from 2008, the value of the assets has grown 2.5 times in Estonia, 2.3 times in Latvia and 2.2 times in Lithuania.

“Based on the growth of the second pension pillar assets it is not possible to draw conclusions about changes in the saving habits of households. Saving in the second pension pillar is funded in part by the state in Estonia and Lithuania and in full in Latvia. Also, for people of a certain age, saving in the second pension pillar is mandatory in Estonia and Latvia. In Lithuania, the second pillar is voluntary for everyone,” explained Triin Messimas, management board member of SEB Elu- ja Pensionikindlustus.

While the volume and rate of growth of second pension pillar assets is similar in each of the countries, differences become evident when comparing the volume of assets per capita. This figure is the highest in Estonia at EUR 1865, followed by Latvia at EUR 1102 and Lithuania at EUR 700.

“Residents of Estonia have saved the largest amount of assets, as historically the average income has been higher here, with the time of accumulation being longer and rate of participation higher. In Lithuania, the amount of second pension pillar assets per resident is the lowest, due in part to the lower participation rate of working-aged people,” stated Messimas.

“However, income from the first and second pension pillar cannot cover the level of income necessary to maintain the previous living standard, the recommended level of which is approximately 65 per cent of pre-retirement income. The monthly pension received from the first and second pension pillars differs by age group and income level. In Estonia, the first and second pension pillars together add up to a rate of replacement of 40% of the average salary. This means that families should accumulate additional assets.


For more information:

Maarja Gavronski
Project Manager for Communication
Marketing and Communications Division
SEB Pank

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