LHV opens pension investment account opportunity for its clients

4. January 2021

For clients to be able to use the opportunity created with the pension reform – to manage their II pension pillar assets themselves – LHV Pank will already enable the conclusion of a pension investment account (or PIA) contract from 1 January. By concluding a contract between 1 January and 31 July, the pension investment account can begin to be used from September 2021.

According to Martin Mets, the Head of Investment Services at LHV Pank, the PIA is primarily meant for those who wish to manage their pension assets independently, using the II pillar opportunities at the same time. “A person’s 2+4% pension contributions can be directed to their personal pension investment account, and the funds collected to the pension fund can also be transferred to the PIA without income tax. Through the PIA, LHV offers customers the opportunity to purchase securities listed on stock exchanges, such as shares or fund units, but assets can also be held as cash or even as a fixed-term deposit,” explained Mets.

According to Mets, for a skilled investor, the PIA is an excellent means for collecting pension, since it can be used within the II pension pillar system, and the person’s own pension contributions are amplified by the contribution of the State. “While currently, the number of Estonian stock market investors is approximately 50,000 people, almost 800,000 people have joined the II pillar. We believe that thanks to the PIA, we will be able to multiply the number of investors in Estonia in the coming years. The PIA certainly isn’t for everyone – if you do not know the risks, you should not gamble with your pension funds – however, I believe that there is a large number of people in Estonia who wish to take responsibility and make decisions over their finances themselves,” Mets commented.

As the market leader in investment services, LHV Pank is developing the pension investment account to perfectly correspond to the needs of clients. Thus, in addition to standalone transactions, it will be possible to use automatic investing for which, similarly to the LHV Growth Account, the pension collector will select the securities suitable to them, and the bank will make regular purchase transactions for the client. Automatic investing enables a PIA client to invest their monthly pension accruals on stock exchanges, simply and conveniently.

The LHV PIA will be subject to a new price list that entered into force on 1 January, which means that Baltic share transactions are free of charge via the PIA, the holding of Baltic securities is also free of charge, the holding of foreign securities is free of charge up to EUR 50,000, and the transaction fees for foreign securities are lower than before. By way of exception, transactions with foreign shares are subject to even lower transaction fees until the end of 2021, namely 0.1% of the transaction value, at a minimum of EUR 10 per transaction. The aim of more favourable fees is to enable clients to independently reinvest the money that has accumulated in their pension funds at the best possible conditions.

More information: lhv.ee/pik

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank and LHV Varahaldus. LHV employs over 500 people. LHV’s banking services are used by 247,000 clients, and pension funds managed by LHV have more than 180,000 active clients. LHV’s UK branch offers banking infrastructure to 140 international financial services companies, via which LHV’s payment services reach clients around the world.

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