Tadas Gudaitis, the head of the Lithuanian Investment and Pension Funds Association (LIPFA), which has been polling public opinion for three years now, notes that a similar level of sentiment has been maintained throughout this period.
„2019 is a kind of a reference point for us, as it is the year when the reform of the second pillar of pensions took place, and the companies managing pension savings switched to a system of life-cycle funds, which adapts the investment strategy to the age of the participant. In that year, 75% of respondents agreed that it was important to save for retirement in advance, and a year later, 73% agreed. In this year’s survey, we are in between, but it is clear that we are largely within the statistical margin of error, and the overall level of awareness remains really high, which is great news,“ says T. Gudaitis.
He believes that the dynamics of extreme opinions for and against are equally important when observing the dynamics of public opinion.
In 2019, 27% of respondents strongly agreed that it is important to save for retirement in advance. The year before last, 31% of respondents thought so, and 30% last year. This was strongly opposed by 6%, 5%, and 6%, respectively.
According to T. Gudaitis, the share of the public with a particularly favourable attitude towards saving crossed the 30% threshold just after the first year of the reform, when savers clearly felt the effectiveness of the changes.
„In 2019, Lithuanian pension funds earned a real return of +16.6% and ranked historically first in the world in the Organisation for Economic Co-operation and Development (OECD) ranking. However, in the following years, the returns were also really good, so it is not surprising that the share of the pension pillar II sympathisers has increased after the reform,“ says the head of the association.
Looking only at working people who can currently save a small part of their income for retirement in Pillar II or who have decided not to do so, 31% strongly support the idea of saving for retirement upfront. Traditionally, respondents with higher education and income are the most favourable towards saving for retirement. By contrast, the share of sceptics is in line with the general cross-section of society at 6%.
According to Mr Gudaitis, this year’s opinion poll is special because it also covers the two days of the war in Ukraine, which Russia launched on February 24.
„The war is a complete shock for us as a society and, of course, for the economy. Such major shocks tend to exacerbate doubts about the future, forcing us to make acute decisions and either save heavily or, conversely, spend money, questioning the way we have managed our personal finances. Therefore, although the war factor appeared at the very end of the poll, the fact that public support has remained so high in such a situation is a great achievement,“ says the investment expert.
Spinter Tyrimai conducted the opinion poll for LIPFA on 17-25 February this year. The survey was carried out among 18-75-year-olds.
More than 80% or 1.37 million of the Lithuanian working population participates in the Lithuanian second pillar pension system, which complements the state social insurance system. Five pension fund management companies, Aviva Lietuva, INVL Asset Management, Luminor Investments Management, SEB Investments Management, and Swedbank Investments Management, invest and protect the pension savings of the country’s population in the second pillar.
The pension funds of the third pillar are managed by INVL Asset Management, Luminor Investment Management, SEB Investment Management and Swedbank Investment Management.