Ideas on supplementary pension accumulation in your business

When is the best time for that?

When you want to motivate all employees
When you want to give extra motivation to particular employees
When you are going to raise wages, it is the employee's choice to spend money on retirement savings

Motivate your employee with 68 % higher amount by spending the same – 102 EUR*

	Adding to the salary, EUR	Contribution to the employee’s pension fund, EUR
Decision to motivate employee (before taxes)	100	100
All individual income taxes	39.5	0
Employee’s money in account	60.5	0
Contribution to III pillar pension fund	0	101.5
Employee’s total income	60.5	101.5
Other taxes paid by the company	1.5	0
Company’s total expenses	101.5	101.5

*The financial benefit is due to the fact that contributions to pension funds are exempt from taxes, which are used as an incentive for the employer to encourage employee loyalty and to contribute to the employee's long-term accumulation. These tax benefits are valid provided that the contribution to the pension fund does not exceed 25% of the employee's estimated employment income. The calculations do not take into account the effect of the amount of non-taxable income. Calculations are based on tax rates effective from 2019.

Which methods are most popular?

In proportion to employee’s salary

For example, the salary is increased by 3 %, with another 2 % granted for pension accumulation at the employee’s choice.

Alternative way to motivate your employee financially

For example, the salary is increased by 3 %, with another 2 % granted for pension accumulation at the employee’s choice.

The company motivates particular employees who meet the company’s criteria

For example, the company decides to motivate only those employees who have achieved exceptional results or those who are most loyal which x years’ experience, etc.

The company and employee accumulate for pension together

For example, the employee allocates 1 % of the annual salary for supplementary pension accumulation, the company also contributes the same amount of 1 %.

Important: Accumulation in pension funds is subject to investment risk, which means that the value of the investment may rise and fall, may recover less money than you have invested. If investments are in foreign currency, exchange rate changes may affect return on investment. Luminor investment management company does not guarantee return on investment, pension fund profitability or annuity payments. Past performance of pension funds does not guarantee future results. Before making a decision on accumulating an additional pension in Luminor pension funds, familiarize yourself with the pension fund rules, deductions, investment strategy and risk factors. Pension funds are managed by UAB “Luminor investicijų valdymas”, registration code 226299280.