If you are a 2nd pillar pension participant, in accordance with the current regulatory requirements, 6% of your gross salary or other income for which mandatory social security contributions are paid are automatically forwarded to the second pillar pension every month, accumulating a rather considerable amount of money that is going to become your source of income in retirement. It is real money that belongs to you, so it is worth keeping an eye on its fate regularly.
Data on the accumulated 2nd pillar pension capital is available in the account statement of the participant of the 2nd pillar pension, which can be downloaded on the unified state and municipalities government portal www.latvija.lv. To see the latest information, select the option "From January 1 to …". If you want to view the data from the previous periods, select the relevant year. Note that the deposits to the account may appear with a delay of up to 4 months.
Once the file is downloaded, it's time to focus on analyzing the data it contains.
At the beginning of the account statement, you will see the information about the selected fund manager and investment plan. This part shows the overall data on the state of your account at the beginning and at end of the selected period for the entire period since you have been a member of the 2nd pension pillar. If you've changed your manager or your plan, you won't see information about how much any particular plan has earned in a given period.
The next part of the statement provides more detailed information. While at first glance the data may seem confusing, only two columns are the most important, reflecting how much money you have contributed to your 2nd pillar pension plan each month.
4. Income subject to deducting the contributions – shows from which gross income on the given date the 6% for the 2nd pillar pension contributions have been calculated. The income can be your salary, self-employed person’s compensation, childcare allowance, unemployment benefit, sickness or maternity benefit.
If your annual income exceeds the social contribution limit of EUR 62 800 in 2021, you become a solidarity taxpayer. This means that 6% of only the amount not exceeding this ceiling is transferred to your 2nd pillar pension. Accordingly, the subject for the contributions on the statement will appear until the month when the limit is reached.
5. Invested/withdrawn amount – the amount by which your pension capital has been increasing monthly due to the contributions made (minus the administrative costs of the State Social Insurance Agency in the amount of 0.18%). Please note that this report does not show investment manager's commission, which is calculated separately.
The statement table contains two more boxes showing the number and value of the units of the selected investment plan. Note that the assets of each 2nd pillar pension plan are divided into many small units with their individual value attributed to one unit. The value of one unit of a pension plan can be, for example, 1.5 EUR, and another one – 2 EUR. Accordingly, by changing the pension plan to another one, with a smaller value of one unit, your savings will be divided into a larger number of units of the new pension plan, although the total amount or the amount of accumulated capital does not change from it at all.
Changes in the value of units on a monthly basis are not very important, because they are impacted not only by your contributions, but also by the market fluctuations. It is worth paying attention to the increase or drop in the long-term value of the units of your chosen investment plan, which will also be reflected in the total pension savings.
