The market in 2011 in the eyes of the private pension's actors
• Legal stability
• Increased system financing
• Improved secondary legislation
• Investment enhancing
• Improve and increase communication with the public
- This is the view of the most relevant personalities in the private pension's field, a "short list" of priorities for 2011 for the profile market in Romania. In addition, implementing the new unitary pension system law is the dominant topic on the agenda of the National House of Public Pensions.
On 11th of February took place the fourth edition of the annual meeting conducted under the slogan XPRIMM Forecast Annual Meeting - Private Pensions. Profile market leaders and experts met with representatives of public authorities to highlight and debate the most important trends for 2011. In the premiere, the event was watched live on XPRIMM.TV.
Taking a brief look at the forecasts made at the beginning of last year, we can say that 2010 rose to the expectations of the private pension's specialists.
A notable performance was recorded in investments, where the pensions fund managed to achieve much more than what was predicted at the beginning of the year. "We can say that 2010 was a good year, hence the real growth, over the inflation, recorded by the participants. When looking over other european markets, it is clear that not to many pension funds achieved positive results. In this context, the yields obtained by the Romanian market are very good", stressed Mihai SEITAN, formet Minister of Labour.
Investment expectations 2011
If operators are particularly interested in overall market growth chances, participants consider most relevant the financial efficiency aspect with which the retirement savings are being invested. Regarding which, the specialists are being optimistic. "The investment context for the pension fund will remain favorable in 2011 and even in the years ahead", declared Dragos CABAT. "The need for increased borrowing by the state and higher volatility of capital market in Romania still offer favorable conditions for the pension funds to obtain higher yields, better than what the participants could obtain by placing their money in a bank deposit or mutual funds", continued the analyst.
However, in order for the investment performance to be maintained at a high level in the long run, some changes are necessary. "For now, the local financial market has enough depth in relation to amounts placed by the pension funds, "said Eugen Voicu, CEO, AVIVA Pensii Private. For the future, we must keep in mind that volumes are rising and "we need a larger investment framework", as Anne - Marie MANCAS, Investment Director, GENERALI Pensions, appreciated. Accelerating the privatization program in the capital market could be one way to give pension funds more investment options. Expanding investment opportunities in Romania is more important as, "although they prefer to stay in the country with investments, pension funds cannot ignore their main duty to invest more profitable for the participants, and if there are opportunities with higher yields outside the country, they shall prefer these investments, "said Radu CRACIUN, chief investment SAFPP EUREKO.
Contributions, priority number one
No matter how good the prospects for investment, the volume still remains the decisive ingredient for the Pillar II success. "Ideal would be for all employee's individual contribution to social insurance budget (10.5% of wage income) to be channeled into private management. It is not easy and there are significant budgetary costs. We want the government to think about a financial solution that will be respected long term" said Mircea OANCEA, President of the market authority (CSSPP).
For now though, the Commission hopes to meet the contribution's term and to no longer deal with reduction attempts or with other proposed measures that could affect the operation of Pillar II. "Unfortunately, recent experiences of some of the most relevant markets in the region, such as Poland and Hungary, are alarming and show that political risk is always present, " continued Mircea OANCEA.
In the same line, maintaining a stable legal environment ranks among the top priorities as seen by the market players: "2011 has good signs, we might even say that all clues lead to optimistic expectations. Political stability remains the questions, namely a stable economic environment, allowing us to develop a long term development strategy. This continues to be the main challenge in 2011, as in 2010, concluded Marius RATIU, CEO, AEGON Private Pensions. And Anne-Marie MANCAS, Investment Director of General Pensions, said 2011-2012 "could lead to recovery of what was lost in 2009 by freezing contributions, if the economy rebounds, in general".
As for public pensions segment, implementing the new pension law system, with all details and changes that it brings into the system, including the connections it has with private pensions pillar II, is an absolute priority of the National House Public Pensions.
The most recent stories on this subject:
» Romanian private pension funds' assets reach EUR 1.33bn
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» XPRIMM's private pensions market awards 2011: And the winners are...
» CSSPP: Full disclosure of investment portfolios of pension funds, twice a year
» Proposal of full tax break for voluntary pensions waits for Parliament's decision
» Compared to the previous months, December brought an extra 10 million in the accounts of Pillar II participants
» Guarantee Fund Act was passed by the Senate
» Mircea OANCEA: we need speed up contributions enlargement in spite of crossing tough times
» 2010: A year with investment results that exceeded expectations
» A peek into the investment strategies of the Romanian pension funds
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