ROMANIA - Romanian private pension funds continued their strong investment performance with both pillars posting double-digit returns over the first three quarters of 2010.
Mandatory pension funds (second pillar) posted an average nominal return of 13.3% for the first nine months into the year, while voluntary pension funds (third pillar) posted an average nominal result of 10.2%.
In comparison purposes, the corresponding average retail interest rates for RON-denominated bank deposits stood at 6%, while inflation for the first nine months of 2010 is also estimated at around 6%.
Since their inception, the mandatory pension funds (launched in May 2008) have an average annualised performance of 16.2%, while voluntary funds(launched in May 2007)have an average annualised return of 9.3%.
These investment returns were achieved through a balanced and diversified investment strategy adopted by a vast majority of pension funds, which allowed the fund managers to take advantage of the volatility in the financial markets.
At the end of September 2010, net assets under management by all pension funds reached RON 4.18bn ($1.3m). The nine mandatory funds manage the majority of the money, with net assets of €910m ($1.2bn), while the 13 voluntary funds manage the remaining €70m.
Crinu Andanut, chairman of the Romanian Pension Funds Association (APAPR), said: "In spite of the prolonged recession and adverse conditions on the financial markets, Romanian pension funds continued to invest prudently and profitably, consolidating their positive returns.
"This comes to show the long term viability of the private pensions system, which managed to weather the storm of the global crisis in a more than reasonable manner, with good results for our plan members."
Here are key takeaways from our 2019 Asset Allocation Outlook on how we are positioning asset allocation portfolios in light of our outlook for the global economy and markets.
This week's top stories included a Freedom of Information request revealing more than 100,000 savers could face six-figure tax bills as a result of GMP equalisation.
The Pearson Pension Plan has entered into a £500m pensioner buy-in with Legal & General (L&G) in the insurer's first deal of 2019.