Mihai SEITAN: Empty accounts mean EUR 40-50 million worth of losses for pension companies
The over 961,000 empty accounts from the mandatory private pension system (pillar II), identified after the first round of contribution transfer is actually a loss of approximately EUR 40-50 million for the companies managing these funds, estimated for the portal www.privatepensions.ro Mihai SEITAN, expert in private pensions and head of FINCOP Pension Broker, the second broker on the mandatory private pension market in the four-month campaign.
"We have almost one million empty accounts in the system. Let’s not forget that the fund administrators paid acquisition commissions for these clients, and now they don’t collect contributions from them, thus not getting any revenues. From my experience as a broker, estimating an average EUR 50 commission to attract each client, the million of empty accounts means in fact approximately EUR 40-50 million losses for the pension companies", stated Mihai SEITAN.
He also said that these losses incurred by the companies shall be recovered, one way or the other. Eventually, they will impact on the active participants contributing to the system. One possibility would be to maintain the administration commission at the maximum allowed level for a longer period of time, until the empty accounts-related losses are covered from the collected administration commissions.
According to the law and the issuing prospects of the 14 mandatory pension funds on the market, they collect only two commissions from the participants: one for the admission to the fund, paid from the gross contribution, before transforming it into fund units (this commission represents maximum 2.5% from the gross contribution transferred in the fund) and one for asset management, a maximum of 0.6% per year, from the net assets.
