The more people save at Tuleva, the less we all pay in fees. The less we pay in fees, the more of the returns we keep for ourselves. This is the essence of Tuleva’s model. Our assets under management have grown by 300 million euros in a year and exceeded the 1.3 billion euro mark. Therefore, we can lower fund fees once again. Starting December 1, the ongoing fees for all Tuleva funds will be 0.29%.

A year ago, Tuleva’s assets under management crossed the one billion euro threshold. It took us nine years to reach that milestone. In the last year alone, our assets have grown by over 300 million euros, bringing our total volume to over 1.3 billion euros. Together we paid 160 million euros into the funds. New savers brought us 70 million euros of assets previously accumulated elsewhere. The stock markets also had a good year, despite a crash in March. 

We lower fees as soon as possible

Investing is a volume-based business, and as the assets under our management grow, the costs per investor decrease. Every new euro added to Tuleva funds helps reduce fees for everyone.

In the last months, we have also made an effort to keep our costs under control. In August, we decided to conduct a larger part of our product development in sprints. This decision allowed us to reduce Tuleva’s permanent team by four people and consequently lower our running expenses.

For these reasons, we are able to reduce our fees, while still leaving ourselves adequate buffer to weather potential market downturns. Starting December 1, 2025, we are reducing fees across all Tuleva funds to 0.29%.

Tuleva members benefit further because we return a portion of our fees to ourselves. Each year, every member receives a 0.05% rebate of the value of their savings in Tuleva’s second and third pillar funds.

The more people save together with us, the more confidently fees will drop for all Estonian pension savers

Lowering fees has a small impact on the average Tuleva saver, as fees decrease by only a few percentage points. However, that is not the main priority. Tuleva was created to increase competition among pension funds. We lower fees to make saving for retirement more affordable for everyone.

Lowering our fees does not make any single Tuleva fund the cheapest on the market. However, we are confident that all of our funds are good funds, as Tuleva remains the fund manager with the lowest average fees in Estonia by a significant margin. (2)

In the Tuleva model, everyone covers their own costs – no one else pays for your savings, and you don’t pay for someone else’s. In contrast, banks offer both low-fee funds and very high-fee funds, with the latter subsidizing the low-cost options.

The less you pay in fees, the more you keep yourself

While pension fund fees may seem negligible, their impact over the long term is significant. Tuleva investors understand that saving on fees means having more wealth in the future.

One in five people who recently transferred their second pillar to Tuleva previously saved in a fund with a fee over 1.2%. On average, those transferring from such a fund had accumulated €14,500 in their second pillar. In 2025, they would pay a fee of 1.2%, amounting to nearly €175. By moving their pension savings to Tuleva, they would instead pay just €45 – almost 4 times less.

This is not some distant future projection or theoretical figure; it’s real savings. It’s like switching your family’s expensive mobile plans to more affordable ones – a small effort that saves money and generates returns for decades. You can calculate the impact of fees on your savings using our pension calculator.

Tuleva lowers fees because we can

We are not pressured by the government or competitors to lower fees. The owners of Tuleva are the same people growing their wealth in our funds, and it is in their interest to keep costs under control. Thanks to this, other Tuleva investors can also rest assured that saving with Tuleva will become even more affordable in the future. As more people save in our funds, we can continue lowering fees. The larger our fund size, the lower the costs for everyone.

Initially, Tuleva’s goal was to bring low-cost index funds to Estonia. Now we know that our greatest contribution is helping more people save wisely and consistently. That’s why we aim to cut through the noise and misleading advertisements to help people make informed decisions.

Moreover, the larger we grow, the stronger our voice in advocating for investors. Every euro saved strengthens our ability to push for a fair and modern pension system in Estonia.

See how much you’re paying in fees on your pension savings.

Log in to your pension account

We updated the terms of our pillar II and pillar III funds. The goal of these changes is to bring the terms fully in line with our investment strategy and clarify some unclear wording. The portfolios themselves are not changing.

Tuleva’s fund terms differ from most other Estonian pension funds in one important way: while fund terms usually state what the fund manager may do with savers’ money, ours state what we do. This way, reading our fund terms gives a clear overview of what assets are actually in the portfolio. (1)

Changes in investment restrictions

Compared to eight years ago, when we started Tuleva, more low-cost index funds have become available to us as a fund manager. For example, just 4–5 years ago, we couldn’t include Exchange Traded Funds (ETFs) in our portfolio because their costs were too high. Today, those costs have dropped. As a result, around one third of our stocks fund portfolio is now invested through ETFs. The rest is invested in low-cost traditional index funds, which – unlike ETFs – are not listed or traded on any stock exchange, just like Tuleva’s pension funds.

As we analysed the terms, we realised they didn’t fully reflect our investment strategy in every detail as we had originally planned. That’s why we clarified the wording and aligned the updates with the Financial Supervision Authority. Our investment strategy remains the same. So, what exactly has changed?

1. One of the key principles we follow when selecting funds for our portfolio is that we only buy and sell fund units in euros. This keeps transaction costs lower.
   
   Previously, the terms required that fund units must be denominated in euros – meaning the fund’s NAV, performance and costs are calculated in euros. But for an index investor, this doesn’t really matter, since internal accounting has no impact on a fund’s performance or risk. Any fund that invests outside the euro area is exposed to currency risk anyway, because the underlying assets (like company shares) are bought in USD or another local currency. That’s why we clarified the terms: funds in our portfolio must be tradeable in euros.
2. Another principle we follow is daily liquidity. Our funds must be able to sell their investments quickly. Previously, the terms stated that fund units in our portfolio must be traded on a regulated securities market. But that’s not the only way to ensure daily liquidity. The index funds we hold in our portfolios – even though some of them are not Exchange-Traded Funds – allow us to redeem our units within a few day. That’s why we revised this wording in the terms.

Update to the fund manager’s capital requirement

We also brought the fund terms into line with a change in the law that sets how much of its own money the fund manager must hold in pillar II funds. When we started Tuleva, the requirement was 2% of the fund’s assets. A few years ago, the government lowered it to 0.5%.

Why don’t we set a higher requirement for ourselves? We don’t need to. Most of the money in Tuleva’s pension funds already belongs to the owners of the fund manager – the members of the Tuleva Commercial Association. In addition, the majority of our association’s capital is invested in our own pension funds – as stated in our membership capital terms. That’s why no extra obligation is necessary. (2)

When do the updated terms take effect?

Under the law, changes to fund terms only come into force after unit-holders have had time to review them and, if they wish, leave the fund at no cost. That means:

• The updated terms of the Tuleva World Stocks Pension Fund and the Tuleva World Bonds Pension Fund will take effect on 1 September 2025.
• The updated terms of the Tuleva Third Pillar Pension Fund will take effect on 15 June 2025. (3)

Tuleva never charges entry or exit fees. This means you can leave our funds at any time without paying a redemption fee. If you wish to transfer your savings elsewhere before the new terms take effect, please submit your application by: 31 July 2025 for pillar II funds (Tuleva World Stocks Pension Fund and Tuleva World Bonds Pension Fund); 14 June 2025 for the pillar III fund (Tuleva Third Pillar Pension Fund). You can submit your application through your internet bank, at the Pension Centre, or on Tuleva’s website.

The updated terms were approved by the Financial Supervision Authority on 12 May 2025. As a reminder, we also updated the funds’ prospectuses and key investor information documents in March 2025.

Related documents (in Estonian):

• Tuleva World Stocks Pension Fund terms (from 01.09.2025)
• Tuleva World Bonds Pension Fund terms (from 01.09.2025)
• Tuleva Third Pillar Pension Fund terms (from 15.06.2025)
• Analysis of changes to second pillar fund terms
• Analysis of changes to third pillar fund terms

1.  For example, see Swedbank 1970–79 fund terms.
2. As of the end of April, our fund manager’s own investment represented 1% of the pillar II fund assets.
3. Under the law, pillar II fund terms can take effect on the next switching day (which is 1.09.2025), and pillar III terms one month after notice is published.

We implemented two positive changes in our funds. First, we lowered fees once again — now, the ongoing fees for all Tuleva funds are just 0.31%. Second, we clarified our recommendation to save in an equity fund regardless of age. The goal remains the same: to create the best conditions for growing our money as savers.

The more savers in Tuleva, the lower the fees for everyone

Since the launch of Tuleva, we have lowered our fees six times. Back in 2017, we started with a 0.5% fee, and now, as of March, the total ongoing fees for both the second and third pillar funds have dropped to 0.31%.

Investing is a scale business — the larger the assets we manage, the lower the costs per saver. Since our last fee reduction in November, our funds have grown by €100 million, allowing us to lower fees again.

I’m confident that we’ll reduce fees even further in the future. After all, Tuleva is owned by its savers, and we have every reason to lower costs as soon as it’s sustainable. 

For Tuleva association members, saving in our funds is even more beneficial. As owners, we get part of the fee back — every year, we receive a 0.05% member bonus on our second and third pillar savings in Tuleva funds.

For those who are not members of Tuleva association, you can find some slightly lower-fee index funds in the pension fund selection at banks. These are also solid options for long-term saving. We’re genuinely happy that index fund fees across the board have significantly decreased over the last five years.

It’s only sad that the fees for banks’ old actively managed funds have not followed the same trend. In fact, nearly two-thirds of Estonia’s second-pillar savers are still in those expensive funds. The reality is that banks cover their high costs and generate profits for their owners at the expense of these savers.

Money should generate returns for as long as possibleIn addition to lowering fees, we also clarified our recommendation to stay in an equity fund regardless of age. Previously, we set a conditional age limit at 55, while still outlining cases where stock funds could be considered beyond that. We’ve learned that our recommendation needs to be even clearer.

So, here it is: A low-cost equity fund is the best choice if you don’t plan to withdraw your entire second pillar within the next five years.

The key point is that the biggest risk for Estonians when saving for retirement isn’t market fluctuations — it’s not saving enough. Very few of us earn high enough salaries to accumulate a sufficient amount without earning returns on our savings.

Risk and return go hand in hand in investing. While stock prices fluctuate more than bonds, the historical long-term returns of stocks have been significantly higher. Finnish and Swedish pensioners don’t live well because their governments hand out generous benefits, but because their savings have compounded strong returns over decades.

What should you do?

Market fluctuations won’t worry us as savers if we use our second and third pillar funds as a regular pension supplement. The state pension (first pillar) provides stability. That’s why Sweden, for example, automatically keeps people saving in equity funds even at an older age — because it serves as an addition to their national pension. In Sweden, people can’t even withdraw their pension savings in a lump sum; they can only take it as monthly payments.

What Sweden has made automatic for its citizens, we can choose to do manually. The good news? You don’t have to do much at all. Tuleva savers can confidently continue accumulating money in our second and third pillar stock funds until retirement without unnecessary fund switches.

If you eventually need to start using some of your savings, just log in to our website and set up regular drawdowns (by signing a fund pension agreement).

Historical stock market data suggests that with this approach, there’s less than a 2% chance that your total withdrawals will be lower than your total contributions — even if you moved your savings into stock fund just before starting withdrawals.

Of course, this is not a guarantee — the future may look very different from the past 100 years in the stock market. It’s human nature to underestimate long-term statistical probabilities. But looking at it the other way around, this is how we can make the most of the contributions we’ve made over our lifetime.

The updated fund prospectuses, along with official explanations, are linked here: II Pillar Prospectus and III Pillar Prospectus (in Estonian). These took effect on March 3, 2025.

(1) Over the past five years, fees for all Estonian second-pillar index funds have decreased by 10–20%. Meanwhile, fees for actively managed funds have mostly increased. You can see the fee trends here.

(2) Finland’s largest pension fund manager, Ilmarinen, has achieved an average annual return of 6% over the past 27 years, while Sweden’s national pension fund, AP7, has delivered an average annual return of 9% over 23 years. Sources: Ilmarinen 2024 annual report and AP7 Safa website.

(3) More specifically, historical data suggests that with 95% certainty, a person who moves their savings into an equity fund at age 55 will see their assets exceed both their starting balance and interim contributions after 10 years. For those interested in statistical analysis, this Google Sheet provides further details. I’ve kept the calculations as simple as possible.

Dear Tuleva members and investors,

The year 2024 was marked by three significant milestones. First and foremost, we, as savers, once again managed to increase our contributions: together, we set aside 130 million euros from our salaries over the year, and more than 14,000 people decided to raise their contributions to the second pillar. Second, our assets surpassed the 1 billion euro mark, allowing us to lower fees once again. And third, we pursued a fair resolution through the courts regarding the amount of the fine imposed on us at the start of the year.

We, the investors of Tuleva, have done very well in recent years

For most of us, the assets in our pension accounts have grown substantially over the past three years. While three years ago, only 4,000 people had accumulated more than 25,000 euros in the second and third pillars, that number has now risen to 14,000. Additionally, we now have 4,900 people with assets exceeding 50,000 euros – a significant increase from just 1,000 people three years ago. (1)

Our formula for success is simple: start saving early, contribute as much as possible, and ensure your assets earn a fair return (in Estonian). However, this is easier said than done. Sure, everyone wants to secure their own future and that of their loved ones, but many are unwilling to do so at the expense of their current financial comfort. As a result, most people end up saving less than they actually need. (2)

Our goal is to support one another in saving consistently for the future while making the most of the opportunities provided by the second and third pillars. Although we can’t contribute directly to one another’s funds, we can make saving easier and more effective by sharing experiences, encouraging one another to take the necessary steps, and leveraging the economies of scale from pooled pension funds to secure favourable terms for saving.

Today, Tuleva has over 77,000 savers. Many are just starting their savings journey, but an increasing number are saving with real determination, contributing at least 16% of their monthly income to our funds.

Our goal is to reach 100,000 determined savers by the end of 2027. Last year, we made strong progress towards this target. Over 28,000 people began contributing to the third pillar or increased their current contributions, while more than 14,000 Tuleva savers raised their second pillar contributions. As of the beginning of this year, we already have 6,641 people whose savings rate places them firmly in the determined savers group, up from 4,200 a year ago.

What particularly pleases us is the number of people who increased their contributions to the second pillar. The best way to remain committed to saving is to make it automatic. The contributions to the second pillar are deducted before the salary is paid out, so the saver doesn’t have to rely on self-discipline or memory. What’s especially encouraging is that most of the 14,000 savers who raised their contribution rate opted for the maximum of 6%. Higher contributions will be reflected in the pension accounts in February (in Estonian).

Collectively, we saved a substantial amount last year – 130 million euros. Of this, we transferred 75 million euros to the third pillar, meaning that in the spring we’ll receive 15 million euros back from the stas as income tax refund.

Another significant contributor to our asset growth was investment returns. Last year, global stock markets rose by 25%, and over the past five years, the average annual return has been 11%. Considering the historical performance of financial markets, it is highly likely that there will be future years and even five-year periods with negative returns. However, the best long-term results will be achieved by those who don’t attempt to predict market fluctuations but instead focus on avoiding unnecessary fees and resist the temptation to move their assets out of the stock market into deposits simply due to their fund manager’s concerns. (3)

How do we grow?

We ended the year with 64% more assets than at the start of 2024. Contributions and asset transfers by new savers increased Tuleva’s assets by 36% over the year, while withdrawals by those leaving the second and third pillars or switching to other funds reduced our assets by 5%. This growth rate aligns remarkably closely with the projections in Tuleva’s 100,000 savers strategy from two years ago, demonstrating that, at best, you achieve what you dare to dream.

In November last year, the volume of our funds surpassed 1 billion euro mark, and we began the new year with 1.1 billion euros in assets. This growth was driven not only by strong global market returns but also by contributions from savers, redirected assets from new savers and a very small number of savers leaving our funds.

Last year, current and new savers brought 101 million euros to our funds, transferring assets previously invested in other pension funds or insurance contracts. In total, more than 80,000 Estonian pension savers made exchange transactions with their second pillar assets last year, and Tuleva welcomed nearly 6,800 of them. The key driver of our rapid growth, however, is loyalty: once we as savers choose Tuleva, we stick with the choice, even if the next salesperson in a shopping centre or bank lobby tries to win us over.

During each 4-month exchange period, less than 1% of the assets in our second pillar funds are withdrawn through exchange transactions. In contrast, the remaining fund managers lose between 2.5% and 7% of their assets in this way.

This provides us with a significant cost advantage. Most fund managers spend millions of euros annually to attract new customers, relying on costly armies of salespeople. Unfortunately, they lose a comparable amount each year due to asset outflows from departing customers. Banks’ fund managers often claim that their high expenses are driven by the high cost of active asset management. However, it’s the need to sustain these expensive sales teams (in Estonian), coupled with their modest performance due to high customer turnover, that truly makes their operations costly. (4)

This is why our funds continue to grow while others remain stagnant. Tuleva’s market share among Estonian pension funds has doubled over the past three years. At the beginning of 2025, we narrowly overtook SEB, which had been the third-largest fund manager in the market.

Larger volume → lower fees

The growth in assets enabled us to reduce fees once again. At the same time, we took the opportunity to simplify our fee structure: all our funds now have a uniform ongoing charges rate of 0.32% per year. In addition to this low fee, for Tuleva members investing with us is even more advantageous than these fees suggest. Each Tuleva member will receive 0.05% of the value of the assets accumulated in Tuleva’s second and third pillars as a membership bonus every year, credited to their personal member capital account.

The bar representing Tuleva is a single colour, reflecting the consistently low fees across all our funds. This ensures that Tuleva savers can confidently avoid the risk of inadvertently choosing a fund with significantly higher fees after seeing an advertisement for a low-fee fund.

How to talk honestly about pension funds?

At the beginning of last year, we appealed the Estonian Financial Supervision Authority’s decision to fine Tuleva 100,000 euros for shortcomings in our advertising. The court ruled that while our advertisements had deficiencies, the fine was disproportionate and reduced it by six times.

This dispute was far from easy for us. We would much prefer to avoid legal disputes altogether, especially with the state or regulatory authorities. In the financial sector, it’s common for companies to pay substantial fines without admitting their liability. This approach allows them to avoid lengthy and costly litigation while preserving their reputation. However, such settlements often leave the public uncertain about whether justice was truly served.

This is why we chose to challenge the Financial Supervision Authority’s decision in court. The court agreed with the Authority that we had violated advertising rules. This is painful to acknowledge. We admit that we wanted to do too much too fast. We had already changed our communication practices in 2023 to prevent similar mistakes in the future. However, the court, like many Tuleva members, found that the fine was disproportionate given the minor nature of our offence, and therefore significantly reduced its amount. The judgment, however, has not yet entered into force, as the Authority has appealed to the Supreme Court. (5)

We hope the judgment will help improve communication activities of all fund managers. Notably, the court emphasised that information about pension funds must be easily understandable to all savers. Financial service advertisements in general need to be clear to the average saver, but given that nearly everyone saves in pension funds, the threshold for simplicity is even higher. This principle aligns with our own tasks, set out in Tuleva’s articles of association, to make saving an activity that is easily understandable for everyone in Estonia.

Our dispute may have also contributed to the Ministry of Finance taking steps to simplify how pension fund information is presented. A recent analysis (in Estonian) proposes replacing the complex and formal key investor information document with a straightforward and universally understandable comparison table. More importantly, the Ministry intends to introduce a requirement for individuals to be able to view their personalised annualised rate of return in their internet bank. We have repeatedly highlighted that the current presentation of returns in internet banks is far from transparent (in Estonian).

Tuleva has a new Supervisory Council

Last year, we elected a new 10-member Supervisory Council for the Association. This is the third configuration of our Council. Of Tuleva’s founding members, Kristo Käärmann, Loit Linnupõld and Indrek Kasela will continue serving on the Council. In addition, the founders elected Priit Lepasepp, who previously served on the Association’s Management Board, to join the Council. Another member who will continue her role from the previous Council is Kristi Saare.

The other five members are newcomers to the Council. Kadri Lainas, Johanna Ambre, Riin Mäesalu, Kirti Rebane and Marit Finnie have all been Tuleva members for years and are actively saving their second and third pillar assets with us.

The main task of the Council is to ensure that Tuleva remains true to its mission: to help people build their future capital with confidence by putting money aside on a regular basis. The Council approves the key terms and conditions of our funds, including fees and investment strategy. What better way to ensure that our fund manager acts in the best interests of savers than to place oversight in the hands of a Council elected by the savers themselves?

You can find a summary of the work of the previous Council here (in Estonian).

Our financial results were strong

According to preliminary estimates, we earned approximately 466,000 euros in EBITDA last year. After accounting for depreciation of 54,000 euros, the remaining amount represents profit from our business activities, which is split into two parts: 155,000 euros as a membership bonus for Tuleva members and 257,000 euros as operating profit. Since Tuleva’s foundation, we’ve earned a total of 888,000 euros in EBITDA.

It’s no coincidence that last year’s EBITDA exceeds the combined EBITDA of all previous years. In 2022, in line with Tuleva’s new strategy, we decided to expand our team and invest heavily in growth. The investment made reduced our EBITDA in 2022 and 2023. While the success of growth investments is never guaranteed, the results from the past year confirm that the investment is beginning to pay off.

In addition to business profits, the owners of our membership capital also earn investment returns. Indeed, our capital is primarily invested in the units of our own pension funds, and their value increased by 1.5 million euros over the past year. Since 2016, the membership capital has earned a total of 3.7 million euros in investment returns.

Following the auditor’s advice, we made a retrospective adjustment to the 2023 reports by recognising part of the work contribution expense planned for 2024–2026 in the 2023 budget. This increased the 2023 work contribution expense by 105,000 euros. (6)

As in previous years, the reports will be prepared during the first quarter and then sent to all Tuleva members for approval at the general meeting. The annual report is currently undergoing audit.

Investments in 2025: a new savings product and optimised payouts

In 2025, we’ll continue investing in Tuleva’s growth. Alongside our regular work with the second and third pillars, we plan to launch two new projects. In the coming months, we intend to apply for an activity licence for an additional savings product, and establish a proper payouts system.

Let’s begin by outlining the first project. For most people, securing their future through the second and third pillars with tax relief is sufficient, but not for everyone. Every year, more individuals are taking full advantage of the third pillar. There are also many who are looking for reasonable options to invest in index funds through their company or even on behalf of a child.

While several companies now provide the option to invest in broad-based low-fee index funds, we consider the process too complicated. In most cases, these broad-based low-fee index funds are offered alongside dozens – if not hundreds – of less advantageous options. Too much choice can be overwhelming, so money often just sits on deposits.

Therefore, Tuleva members have repeatedly asked us when we’ll create an additional fund outside the pension system. For this, we require an additional activity license. At the end of last year, we began work on this project and started preparing an application for the necessary license. We will submit it to the Financial Supervision and Resolution Authority in the coming months. If everything goes as planned, we could have a new fund up and running by the end of the year.

Finally, let’s outline the second project. Until now, we have focused solely on saving and left the payouts for the future. After all, it’s logical – if nothing’s been saved, there’s little point in dedicating much time to considering payouts. Now, however, the time has come to turn our attention to them.

Most people withdraw their accumulated assets from the second and third pillars as a lump sum when they reach the age of 60–65 years, paying a 10% income tax on the amount accrued to the state. At the same time, many continue working and, in fact, have no immediate need to use their pension assets. How can we help people decide more wisely about when and how they use their savings? After all, the law doesn’t require withdrawal of funds upon reaching retirement age, and it also provides for the option to use the savings without paying income tax in the form of a funded pension, i.e., through monthly payments.

Currently, there are still relatively few people aged 60 and older among Tuleva savers, but it’s certain that their number will increase in the coming years. This is why we already developed the first version of a payout solution (in Estonian) last year. However, work on the payouts is still at an early stage. Just as we have observed and learned how people make decisions when they start saving, we now need to understand how they reach the decision on how to use their savings. Additionally, we need to help savers make more informed and profitable choices for themselves.

(1) We chose the threshold of 25,000 euros for the simple reason that this amount has some tangible impact at retirement. If you are 65 years old, have 25,000 euros in the second and third pillars, and decide to retire, you would receive a monthly payment of more than 100 euros from your pension funds. See the payout calculator (in Estonian) for details.

(2) This statement is based on several assumptions. We don’t really know how much money we will need in the future, and even if we did, it’s difficult to determine with sufficient certainty how much we should save for it. The Foresight Centre of the Riigikogu (Estonian Parliament) has estimated that to secure a reasonable income at retirement age, a person should save 15–20% of their income throughout their working life. However, only a small portion of the Estonian population is able to achieve such a savings rate (see, for example, the analysis of the sustainability of the pension system (in Estonian)).

(3) As an indicator of global market returns, I use our funds’ benchmark index MSCI ACWI, measured in euros. You can find a summary of the annual performance of this index here. For long-term historical returns on the stock markets, I rely on data from the Dimson, Marsh, and Staunton database, with their annual reviews available here.

(4) The fund managers’ reports will be published only in March–April. My assessments are based on previous years’ reports, which I have regularly summarised on the blog (in Estonian).

(5) At the beginning of February, the Supreme Court of Estonia announced that it would not proceed with the Financial Supervisory Authority’s appeal in our dispute. As a result, the Harju District Court’s decision came into force, reducing the fine imposed on Tuleva by six times.

(6) Our previous policy was to recognise the work contribution expense in the reports when the employee became entitled to it. Our contracts specify the total work contribution amount for three years and the timeline for entitlement. Usually, employees become entitled to the first portion after 12 months (if they leave earlier, they forfeit the contribution), with the remaining parts vested in subsequent years. The auditor recommended applying the IFRS standard, which requires most of the expense of a three-year contract to be provisioned in the first year.

At the beginning of the year, we appealed the Financial Supervision Authority’s decision to fine Tuleva 100,000 euros for shortcomings in our advertising. The court acknowledged deficiencies in the advertisements but concluded that Tuleva’s fault was minor. As a result, the fine was reduced to 17,500 euros.

Pension fund information must be understandable to everyone

During the dispute, the court conducted a thorough analysis of the requirements for pension fund advertisements. The court emphasized in its ruling that pension fund advertisements must be clear and understandable, even for those with limited financial literacy.

The court identified three shortcomings in our posts from July 2023.

First, financial service advertisements must include a call to review the terms and conditions of the service and consult with an expert. Pension fund advertisements must also specify where investors can access the prospectus and key information document. In some of our posts, this information was only visible after clicking the “Learn more” button. The court noted that this could have led some people to make hasty decisions about their pension fund without enough consideration. (1)

Secondly, the court found that some of our advertisements may have been misleading. For example, we used the phrase “The only honest statistics”. While some posts clarified this — highlighting that pension fund comparisons often distort performance figures, whereas Tuleva always presents accurate returns — others lacked this explanation. The court ruled that advertisements without this clarification may not have been clear to all consumers.

Finally, one of our posts included the phrase “Preserve your pension fund’s performance and choose a low-cost index fund”. Our aim was to explain that fees reduce pension fund returns and that lower-cost funds are a better choice for investors. However, the court found that some people might interpret this as a guaranteed return. (2)

Tuleva no longer publishes posts of this nature. Shortly after publishing these posts, we updated our communication guidelines to ensure compliance and make our messages clearer for everyone. We also stopped using external service providers for our advertisements to prevent potential misunderstandings. Today, all our communications are reviewed by multiple team members to ensure clarity and accuracy.

We take the court’s judgement seriously. Our communications must be understandable to everyone because the financial world can be complex, and people’s prior knowledge varies widely. Tuleva’s mission is to make pension saving simple and accessible for everyone. Moving forward, we will make our messages even clearer and more straightforward. We believe that true clarity doesn’t come from small-print warnings but from ensuring that the main message itself is simple and easy to understand.

1. I will save for another blog post the discussion on how small-print calls to review fund documents or consult experts actually do not protect people’s interests. After all, we know most fund documents are written for lawyers, and impartial experts are not readily available to most people.