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The first quarter of 2016 has been tough for Lithuania's private pension funds, most of which suffered losses, except for the most conservative ones, LRT reports.

Fund managers say it has to do with the economic cycle and that pension funds had previously been performing profitably for seven years in a row, with an exception of 2011.

"It is normal for markets to rise and drop. But what is it down to this time? With many factors in the beginning of this year: drop in oil prices, some geopolitical developments that the markets naturally react to, also reports of some companies' performance, fluctuation in the prices of government bonds," says Šarūnas Ruzgys, president of the Association of Investment and Pension Funds.

People saving for retirement in private funds have to take interest in the managing of their savings, to use market opportunities and avoid slumps, says Jonas Dirginčius, chairman of the Pension Fund Participants Association.

"A person who signs a contract has to realize that the bank is only doing the maintenance of a share portfolio purchased by algorithms, which is not investment management. The person him or herself manages their investment. I think that Lithuania picked a wrong retirement saving model when any unskilled worker without any special knowledge in economics has to pick their own fund manager and the risk level," says Dirginčius.

The association says it has proposed setting up a government body to represent people saving for their retirement, but politicians rejected the idea.

Over the decade since Lithuania introduced the private pension saving programme, the funds' aggregate earnings averaged 4% per year. 1.2 million Lithuanian savers have so far saved up over €2 billion.

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