FAQ about 2nd pension pillar
What is the 2nd pension pillar? The 2nd pension pillar or the State funded pension plan is a savings scheme that was introduced in Latvia on 1 July 2001. It provides you an opportunity to create additional savings to your 1st pillar age pension ensured by the state. Its goal is to increase the pension capital and also the pension size investing and saving a part of social contributions to the financial and capital market – securities and bank deposits in cooperation with - „GE Money Fondi”.
Who manages contributions accumulated in the 2nd pension pillar? Funds are managed by a team of highly qualified professionals of “GE Money Fondi” that has received a special permit – license of the Financial and Capital Market Commission (FCMC).
Who supervises and controls „GE Money Fondi” operations? “GE Money Fondi” licensing and control is realized by FCMC that may suspend or annul the license issued to an asset manager if violations are revealed in its operations. The FCMC task is to supervise that „GE Money Fondi” and „GE Money Bank” comply with the law and other normative acts requirements, obligations and limitations provided by investment plans’ regulations, as well as accounting principles. “GE Money Bank” also carries out everyday control of funds managers, in which securities acquired by means of funds of the investment plan as well as non-invested funds, are kept. Besides all these funds are kept separate from „GE Money Bank” and „GE Money Fondi” own funds and assets. It ensures security of investment plan’s funds.
What will happen to accumulated funds if the license is annulled? If funds manager’s license is annulled, the SSIA shall transfer accumulated funds to other funds managers and shall inform scheme’s participants on license annulment of a previously chosen funds manager indicating an investment plan, as well as the right to choose any other funds manager indicating an investment plan. From the moment of license annulment till the moment when the SSIA will have chosen another funds manager, a custodian bank acts as an asset manager.
What will happen to my accumulated pension capital if I don’t reach pension age? If a member of the 2nd pillar pension plan dies before reaching retirement age, his funded pension capital is transferred to the special state pension budget. Heirs of the 2nd pension pillar participant cannot inherit this capital.
What influences the amount of funds in the 2nd pension pillar system?
Who and how chooses an asset manager and an investment plan? You choose an asset manager and an investment plan on your own evaluating the most appropriate funds investment policy of an investment plan.
What should I pay attention to when choosing an asset manager and an investment plan?
How often can I change investment plans? 2 times in a calendar year.
How to find out what plan I am in if I have forgotten?
In what currency investments will be made? An asset manager invests funds of an investment plan only in such currency, in which payments of the funded pension capital are made – i.e. LVL.
May I give up the 2nd pension pillar system? No, as it is stipulated by normative acts of the Republic of Latvia. It is possible to choose a different manager.
Is it allowed to participate in the 2nd pension pillar with two asset managers at a time? No, as it is stipulated by normative acts of the Republic of Latvia. |
