According to the latest data from „Swedbank“, 32.3 thousand new II pillar pension accumulation contracts have been concluded in the eight months since the start of the pension reform. 90% of them were participants who returned to the II pillar.
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„We see a clear trend that the number of people who, having taken the opportunity to stop accumulating, later decide to return to the II pension pillar is increasing. I think it is important to evaluate this not only as a statistical fact but also as a certain change in the population’s attitude towards pension accumulation.
The reform has given people more choice and the opportunity to reassess their decision. Some people who took the opportunity to withdraw apparently reassessed what it means to give up regular investing and state incentives for long-term pension accumulation, and, having evaluated the benefits of the II pillar, decided to continue accumulating,“ – 15min said the acting head of „Swedbank Investment Management“ Valdas Sejavičius.
The head of „Luminor Investment Management“ Loreta Načajienė provided similar data.
„We see that some people who decided to withdraw from the second pension pillar later reconsider their decision – as much as 80% of new accumulation contracts are concluded by clients returning to the pension accumulation system,“ the interlocutor said.
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According to her, when making the initial decision, most attention was often paid to the possibility of withdrawing accumulated funds, and only later was it evaluated whether those funds were successfully invested and what long-term benefits are lost by leaving the system.
„Hurrying was not beneficial, just in the first half of this year the return on „Luminor“ II pillar pension funds reached almost 11%. The average amount withdrawn from the II pillar was about 6 thousand euros, while the long-term return of stock markets historically reaches about 8% per year.
This means that such an amount could generate about 500 euros of investment return per year, to which more than 400 euros of state incentive for those accumulating in the II pillar is added. Therefore, holding funds longer in the current account loses not only potential investment return and state support, which is already approaching 1000 euros, but also part of the purchasing power of the withdrawn money due to inflation,“ said L. Načajienė.
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