Romanian pension funds record positive 2009 returns
16 September 2009
Romanian pension funds posted positive returns for the
first eight months of 2009, with average results of 11.31 per cent in
mandatory pension funds, and 10.73 per cent for voluntary pension funds.
The Romanian Pension Funds’ Association (APAPR) has published data
showing that the 12 mandatory pension funds (the second pillar) on its
radar have returned 15.53 per cent for the last 12 months, ending August
2009. Net assets under management reached €476million in the first
16 months after the inception of the system in May 2008. Funds are invested
very conservatively, and the majority are in state securities, bonds and
money market instruments. Equity exposure has fallen from ten per cent
in May 2008 to five or six per cent currently; however, in February this
exposure fell to 1.2 per cent.
The 13 voluntary pension funds (third pillar) covered by the APAPR showed
a 10.65 per cent return for the last 12 months, with net assets under
management at over €38million in the first 28 months after the launch
of this system in May 2007. The total number of plan members hit 175,000,
and these funds, while conservative, are more equity-inclined than those
in the second pillar, at ten per cent.
Crinu Andanut, chairman of APAPR, commented: “Returns posted by
all the Romanian private pension funds proved out to be remarkable and
the conservative approach paid off. All in all, we can now say our industry
kicked off with outstanding results. We managed to escape the crisis unharmed
by the global fall in equity markets, but we entered those markets just
in time to benefit from the rally in the last few months. Our only drawback
is the very low level of contributions – only two per cent for the
mandatory funds, for example. It’s a shame that the industry managed
to perform admirably in terms of returns, and we put those returns on
top of so small contributions directed to the system.”
Of all Central and Eastern Europe (CEE) countries, Romania has the lowest
level of contributions directed to second pillar funds, at two per cent,
although it intends to raise this to six per cent in 2016.
