Losses of Mandatory Private Pension Managers Deepen

05.06.2011 ZF English

Six of the nine mandatory private pension fund managers (2nd pillar) posted cumulated losses of 48.7 million lei (EUR11.6 million), 64% higher than in 2009.

Most managers however managed to improve their net result against the previous year or recorded non-significant changes, with the aggregate growth of losses being due to BCR Pensii tripling its losses from RON9 million to RON31 million, according to the company's 2010 report.

The loss of BCR Pensii deepened at a time when the company completed the takeover of two mandatory pension funds in 2010 (OTP and Prima Pensie) and doubled its operating costs, to around RON37.2 million.

Eureko and Alico diminished their losses against previous years by 17% and 60% respectively, while BRD and Aegon increased their losses.

The biggest pension fund manager on the market, ING, posted a RON2.2 million profit last year, which followed a RON2 million loss in 2009. This is the company's first year of profit.

On the other hand, all mandatory private pension funds ended last year in the black, with their cumulated profits amounting to RON448 million (around EUR106 million).

The assets and financial results of fund managers versus funds are completely separate from a legal and an accounting point of view. Fund managers do not get a share of the profit obtained from investments, their source of revenue is the management fee of 2.5% of contributions.

Keywords:: PRIVATE PENSIONS; , RESULTS