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Romania's mandatory private pension funds post 7% nominal return for 2008, surpassing inflation


The 14 mandatory (2nd pillar) private pension funds on the Romanian market posted a nominal weighted average rate of return of 6.96% for 2008, surpassing the rate of inflation, according to official data published by APAPR, Romania's pension funds' association. The rate of return stands for the first 7 months of operation for these funds (20th May - 31st December); in this period, the real weighted average rate of return was 2.4%-2.8% above the 4%-4.5% inflation in the same period. Annualized, the rate of return would be 11.29% for the whole 2008, that is about 4% in real terms.

According to existing data, the performance of the Romanian mandatory pension funds is the best in the CEE region, where mandatory funds posted negative returns between -7% and -15% for 2008. Polish funds posted an average negative return of 14.2%, Slovak funds lost an average of 6.7% for 2008, Hungarian funds lost 11.7% in the first 3 quarters of 2008 and Croatian funds lost 14.4% in the first 11 months of 2008. These are the 4 largest mandatory pension markets in CEE, in terms of assets.

"This kind of performance is remarkable, especially considering that the market just started in May 2008 and also bearing in mind the deep financial crisis. We proved we can efficiently invest the money on behalf of our over 4 million customers", Mr. Crinu ANDANUT, Chairman of APAPR, said commenting on the results. "The fund managers reached these results due to a prudent approach and to our knowledgeable investment teams. We are a professional market and our first results already show we act in the best interest of our participants", Mr. ANDANUT added.

At the end of 2008, the 14 funds on the mandatory pensions market had 4.03m active participants and net assets under management of 208.7m EUR.

APAPR is the Association of pension companies and depositary banks in Romania. It is a professional, non-political, independent association created to protect the market's interests, for promotion, cooperation, collaboration and scientific purposes. APAPR currently has 20 members and is member of both EFRP and FIAP.
13.01.2009

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