The Pension System in Latvia

As in other countries, the proportion of retirees to workers is growing significantly in Latvia, creating additional financial burdens for the mandatory social security system of the country. In order to maintain the pensions at a level capable of providing sufficient material assurance, a system has been created in Latvia based on everyone's self-interest and responsibility for sufficiently providing for his old age.

According to international experts, Latvia has created one of the most effective and progressive pension sysstems in the world. One of its features are the private pension funds.

The Three Levels of the Pension System of Latvia:

Level 1 Pension System - State Mandatory Non-Funded Pension Plan

Your tax deductions for the government old-age pension goes to to the State social budget and is used to fund the pensions of the present generation of retirees.

Level 2 Pension System - State Mandatory/Voluntary Pension Plan

Part of the funds paid into the Level 1 pension system is separated out to give you the opportunity of investing it profitably and and increasing your old age pension. You have to choose your fund manager and the investment plan most suitable to you.

In the financial group of the SEB banka of Latvia your pension funds will be managed by the investment management company "SEB Wealth Management" (OPTIMUS FUNDS) - www.seb.lv - which offers four investment plans with differing investment policies:

• Investment Plan "SEB sabalansētais plāns" (SEB Balanced Fund)
• Investment Plan "SEB Latvijas plāns" (SEB Latvia Plan)
• Investment Plan "SEB aktīvais plāns" (SEB Active Plan)
• Investment Plan "SEB Eiropas plāns" (SEB Europe Plan)

A more detailed description of the Level 2 Pension System and news on asset management questions will be found at www.manapensija.lv.

Level 3 Pension System - Private Pension Funds

These give you the opportunity to accumulate savings voluntarily for your private pension to supplement the government pension (Levels 1 nad 2 ot the pension system), taking advantage of favorable tax treatment.

• Investments in the Private Pension funds can be made:
• by the individual out of his own means
• by the employer on behalf of his employees out of the company's funds

In distinction from the government pension, the private pension accumulation can be accessed at the age of 55 and is inheritable.

Your private pension capital at the SEB banka of Latvia will be managed by the open-ended pension fund ""SEB atklātais pensiju fonds", which offers three pension plans with differing investment policies:

• Pension plan "SEB-SABALANSĒTAIS"(LVL)
• Pension plan "SEB-AKTĪVAIS"(LVL)
• Pension plan "SEB-EIROPENSIJA"(EUR)