At the end of February, the market’s seven voluntary pension funds (Pillar III) had almost 65% of their net assets invested in T-bills, T-bonds and municipal bonds, according to the data provided to www.privatepensions.ro by the Private Pension Supervisory Commission (CSSPP).
Actually, the voluntary pension funds reached the final stage before the precise aligning to the target-portfolio from their prospectus, in accordance with legal requirements. According to a CSSPP norm, the voluntary pension funds went through a “grace period” where they were allowed to keep their clients’ money only in bank accounts, until each fund reaches the RON 1 million threshold. Once this threshold is exceeded, each fund has 90 days to diversify its investments and align to the target-portfolio promised to their clients through the issuing prospect.
If six of the seven funds have now exceeded the required threshold, at the end of February (according to the most recent available data) some of the funds were still in their grace period. From investments made mostly in bank deposits, as it was at the end of last year, the funds started gradually to diversify and are now focusing mainly on state securities and municipal bonds, to use the rest of the bank account liquidities for buying the other instruments required to be in line with the target portfolio.
At the end of February, the voluntary pension market indicated that the funds had investments of 26.6% in bank deposits (compared to almost 70% at the end of 2007), 64.4% in state securities and municipal bonds (compared to 21% at the end of 2007), 4.4% in listed shares (compared to 1.2%), 4.7% in corporate bonds (compared to 0.7%) and zero in mutual funds (compared to 7.3%). In total, the voluntary pension market had, at the end of February, EUR 5.7 million worth of net assets.
The voluntary pension funds with a medium risk profile (namely five of the seven funds on the market) anticipated (in their prospectus) approximately 20% to 30% of their assets to be invested in listed shares. In other words, the voluntary pension funds will mainly target next the Bucharest Stock Exchange, to become in line with the legal asset investment requirements.
