Czech pension clients rise to 2.8m
CZECH REPUBLIC - The number of privately insured Czechs rose by 150,000 year-on-year to 2.81 million in the first half of this year, the Finance Ministry said.
The number of new clients of Czech pension funds rose by 118,000 for the full year 2003.
A total of 27.5% of inhabitants of the Czech Republic with a population of 10.2 million thus had a private insurance at the end of June 2004. Credit Suisse L&P, PF Ceske pojistovny and PF Ceske sporitelny registered the highest number of clients.
The number of new pension fund clients for the full year 2004 should exceed the last year's record high growth, according to Tomas Matousek, chief executive of the PF Ceske pojistovny pension fund.
Clients' deposits of Czech pension funds topped 86 billion crowns at the end of June 2004, rising by seven percent from March 2004 and by 21% year-on-year. An average client of a Czech pension fund deposits 500 crowns a month.
Czech pensions funds saw their aggregate profits drop by 22.5 percent year-on-year to 1.22 billion crowns (39.4 million euros) in the first half of this year. Experts attribute the lower profits mainly to a slowdown of the growth of foreign stock markets. In 2003, Czech pension funds saw their consolidated profits rise by five percent to 2.4 billion crowns.
The average yield generated by Czech pension funds dropped to 3.2 percent last year, due mainly to historically low central bank interest rates and all-time low inflation in the Czech Republic. Analysts expect the average yield to be higher in 2004 as inflation picked up and Czech pension funds have more opportunities to invest abroad after the Czech Republic entered the European Union in May.
There are 12 pension funds active on the Czech market after a wave of mergers, which has reduced their number from the original 44. Private pension funds entered the market in 1994. The Czech government is currently working on the pension reform that should boost the role of private pension funds.