During their working career, their salary was lower, because a part of it was transferred to a personal account in the fund.
Depending on how long they have been saving and how much salary they have transferred to the funds, residents receive additional benefits in addition to regular old-age pensions ranging from 9.1 to 348.09 euros.
These supplements are called retirement annuities. In April, 3,121 residents of the country already received them. Each of them received an average of 65.16 euros.
The average old-age pension in Lithuania is 596 euros. If only those with the required length of service are counted separately, the average pension is 637 euros, and those without the required length of service – 378 euros.
Thus, annuities account for approximately 10-17 percent. retirement pensions.
Such supplements to pensions for residents are paid from the special Pension Annuity Fund (PAF) managed by “Sodra”.
Every month it is announced how much these benefits were paid out, how many persons received them, how much money is in the aforementioned fund.
Usually, annuities for the previous month are paid on the 26th of each month.
For accumulated wealth – payment every month
During the month of April, 1.3 million was transferred to the PAF. euros for purchased pension annuities. This money was transferred to “Sodra” from the private pension funds of the II tier for those residents who finished saving and retired.
In order to receive an annuity, a person must pay 2.5 percent to Sodra. amount of one-time administration fee, calculated from the amounts accumulated by him. For example, if the fund has accumulated and an annuity is purchased for 10 thousand. euros, 250 euros must be paid to “Sodra”.
At the end of April, the total value of PAF’s assets amounted to 44.8 million. euros. These assets are divided into three portfolios: liquidity, guarantee and growth.
Money is stored in the liquidity portfolio – currently it is slightly more than 1 million. euros.
The purpose of the guarantee portfolio is to secure the funds needed for the payment of annuities in the medium and longer term (about 15 years). The funds of this portfolio are invested in government, central bank and other debt securities, and its value reached 7.7 million at the end of April. euros.
The objective of the growth portfolio is to earn a target return over a long period (15-20 years) that would be distributed as profit to the recipients of the pension annuities in order to maintain the purchasing power of the benefits as much as possible. Its value at the end of April exceeded 35.9 million. euros.
On average, 65 euros per month for each
As mentioned, at the end of April, a total of 3,121 residents purchased pension annuities from “Sodra” – 56 more than the previous month.
In April, they were paid an average pension supplement or annuity of 65.16 euros.
Currently, the highest monthly payment is 348.09 euros, and the lowest is 9.1 euros (the person receiving it purchased a pension annuity for 2.2 thousand euros).
The most popular is the standard pension annuity with a guaranteed payment period, purchased by 68 percent. all recipients of pension annuities.
An inherited standard pension annuity is purchased for the entire amount accumulated in the pension fund.
The state guarantees that Sodra will pay monthly pension annuity payments for life. The heirs will be paid a one-time payment for unpaid benefits to the recipient of the pension annuity until the age of 80.
A standard pension annuity is purchased for the entire amount accumulated in the pension fund on the date of conclusion of the pension benefit agreement. The state guarantees that Sodra will pay monthly pension annuity payments for life. This type of annuity is non-inheritable.
A deferred pension annuity is purchased for part of the amount accumulated in the pension fund. The remaining amount is paid out in periodic payments paid by the pension accumulation company until the person reaches the age of 85. Sodra will start paying the pension annuity when the person turns 85. This type of annuity is also non-inheritable.
The value of the property has decreased
As mentioned, the money transferred to “Sodra” for purchased annuities is invested in securities. If they are sold cheaper than they were bought, the amount of money belonging to residents in the annuity fund increases.
Commenting on the PAF portfolio manager’s latest report, April was not such a successful month:
“Events poured out in April that might not have shaken the financial markets individually, but as they say, ‘drop by drop…’ and the markets gave up.”
The report notes that in April, Israel shelled the Iranian consulate in Damascus, which sent shockwaves through already rising oil prices; electric car maker Tesla announced declining sales; another increase in the US consumer price index was recorded; US retail sales figures confirmed strong economic health, which markets also did not like.
“It’s not just a matter of inflation and a strong economy melting expectations of a rate cut.” It’s also a chipping away at the ‘technology is everything’ narrative and the effects of high interest rates and geopolitical turmoil are finally being felt,” the report said.
Thus, “Sodra” summarizes, in April, the value of investments in the Growth portfolio decreased by 2.79 percent, while the value of the benchmark index decreased by 2.61 percent. in euros.
