3rd pillar pension

Making contributions

The easiest way for the employer to make contributions into a pension fund for their employees is to use the Pension Payment (similarly to salary payments) option under “Payments” section on the Business Internet Banking site. When contributions are made using the Pension Payment option, the employer saves time as all contributions for employees can be made by importing a single file and transferring them in a single payment. To see an example of pension payment, click here. Before the Pension Payment option can be used, it needs to be enabled at any Swedbank branch and the company’s representative who will be able to do it must be specified.

Alternatively, the employer can make the contributions by a regular transfer, specifying in the payment details the employee’s forename, surname, identity number and personal pension account for which the contribution is being made in the pension fund. This is a convenient option in case of contributions for only a couple of employees.

If the number of employees is quite large and for some reason the Pension Payment option cannot be used, the employer can make a single transfer for all employees and, subject to prior arrangement, send the details about the contributions to Swedbank Atklātais Pensiju Fonds AS by e-mail to pensijas3@swedbank.lv, followed by the original of the details of contributions by post to Swedbank Atklātais Pensiju Fonds AS, Balasta dambis 15, Rīga LV-1048.

Participants’ access to capital

The pension fund participants are entitled to receive the accrued supplementary pension capital at the age of 55. However, one can also choose to start receiving the accrued capital later, at the end of active working life, e.g. at the age of 60 - 65. The capital can be received:

• in parts over a longer period of time, e.g. a set monthly amount (the portion of capital left in the pension fund will continue to generate investment income);
• all at once in a single payment.

After starting to take out the supplementary pension capital, contributions still can be continued. To receive the accrued supplementary pension capital, the employee must fill out an application on the Internet Banking site or go to any Swedbank branch. The supplementary pension capital will be paid out within 10 working days. The supplementary pension capital is heritable.

If contributions into the pension fund were made by the employer, then, upon receipt of the accrued supplementary pension capital, the personal income tax is payable, whereas capital gains is payable on the investment profit.

Pension plans

Before investing in a pension plan it is recommended to evaluate risks associated with investments, taking into account that, if Pension Plan invests more in shares and similar securities, then higher is risk that the value of pension plan investments may rise or fall in positive or negative direction. Pension plan for past performance is no profitability in the future.

Calculation and assumptions

The accrued supplementary pension capital becomes available upon reaching 55 years of age
¹ For calculations it is assumed that the personal income tax rate will not change during the accrual period and yearly contributions are less than 10% of yearly gross salary
² Assuming that the employee chooses to make contributions in the Pension Fund as an alternative to net pay rise

For calculation it is assumed that the accumulation is made in one of the selected pension plans "Stability+25", "Dynamics+60", "Dynamics+(USD)" or "Dynamics+100" with an average imagined yield of 2.05%, 4.05% or 6.05% respectively, after all fees mentioned in prospectuses.
The actual return of pension plans may differ from returns used in the calculations and historic yield is not a guarantee for an equivalent performance in the future.