We compared pension fund returns and the fees they charge: one important aspect you may not have known | Business

There are 6 pension accumulation companies operating in Lithuania and all of them divide their clients into 7 standard age groups – each of their funds are invested assuming different risks.

The money of the youngest residents who started saving in pension funds is invested most boldly, and the closer the fund participants are to retirement, the more conservative the investments.

“Now the system is arranged in such a way that the younger a person is, the more riskier investments pay off. Therefore, pension funds intended for younger people often make riskier investments.

And as the retirement age approaches, certain elements of insurance are already introduced in the same funds, investments are made, let’s say, no longer in shares, but in securities, perhaps Government securities”, – 15min said Dr. Virginija Poškutė, director of the Business Sustainability Management Program at ISM University.

In addition, every pension accumulation company must also have an asset preservation pension fund (TIPF). It is always low-risk and designed to protect the resident’s accumulated wealth from inflation. Such funds are suitable for participants who have reached retirement age and those who have chosen to receive periodic payments from the fund.

ISM photo/Virginija Poškute

According to the data of the Bank of Lithuania, in 2023 the results of pension funds were positive, the total weighted change in the value of the unit amounted to 14.26 percent.

But how has each individual pension fund performed in recent months? Which funds have generated the highest returns by age group?

15min also talked to experts regarding whether it is worth changing the fund or even the pension accumulation company, what should be taken into account when making such a decision, and which pension fund taxes anger specialists.