EUROPE - A new report has claimed the introduction of lifecycle investing strategies in Central and Eastern European countries (CEE) has been one of just a series of notable developments enabling the region to get on the right track for pension provision.
Compiled by Allianz Global Investors, the report said eight of the 11 countries analysed had introduced new mandatory individual pension plans to create a capital-funded retirement ‘pillar’ to diversify retirement income and develop capital markets.
Moreover, private pension reform has focused on defined contribution (DC) individual pension accounts the preferred model advocated by the World Bank.
The company added that deep structural reforms have fuelled a 19% per annum increase in private pension assets.
In this context, Allianz Global Investors said lifecycle investment strategies were an interesting development and some CEE countries have taken the first steps towards this strategy by allowing or requiring providers to offer more than one fund with different combinations of equities, bonds and money market instruments.
Brigitte Miksa, head of international pensions at Allianz Global Investors, said: “By introducing capital-funded mandatory pension accounts, CEE countries have ensured a higher sustainability of their pension funds in terms of public finance and are ahead of many Western European countries in terms of diversification of retirement income.”
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