ROMANIA - The Romanian pension market is set for consolidation within in its first full year of business, Simona Diţescu, CEO of BCR Administrare Fond de Pensii, has told IPE.

The €6.6m BCR fund is currently preparing the legal groundwork for a merger with the €2.5m Omniasig fund.

“BCR Administrare Fond de Pensii intends to consolidate its position in the market and we are looking in the market and prospecting all possible merger deals,” Ditescu said.

“The Romanian private pensions market is expected to shrink in 2009 since there are a few players that have less than 50,000 customers,” she argued.

Of the 14 players currently in the Romanian market, Bancpost, OTP, Prima Pensie and KD are well under that mark with client numbers ranging from just over 23,000 to 6,700, according to data collected by the Romanian pension fund association APAPR.

Having started business in May last year, Romanian funds collectively managed an average rate of return of 6.96%. However, inflation stood at 4-4.5%, the association noted.

Ditescu pointed out in terms of sales results the market is split into players owned by a bank and those owned by insurance companies, while APAPR statistics show BCR returned 4.9% in 2008.

Comparing data, the pensions association pointed out “the performance of the Romanian mandatory pension funds is the best in the CEE region”.

“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 three quarters of 2008 and Croatian funds lost 14.4% in the first 11 months of 2008,” APAPR noted.

At the end of 2008, the 14 funds on the mandatory pensions market in Romania had over four million active participants and net assets under management of €208.7m, with the largest player being ING with €80.7m and a return for 2008 of 9.81%.