MACEDONIA - The Republic of Macedonia’s two funds of the mandatory pensions system returned 3.7% and 4.3% respectively over the first six months.
The government granted two pension fund companies licences in 2005 and they are still operating today by managing the “Otvoren zadolzitelen penziski fond” (NLB) and the “KB Prv otvoren zadolzitelen penziski fond” (KBP) respectively.
Since the end of 2006, the value of the pension fund units in the NLB fund have actually decreased by 0.9% while those of KBP have increase by 4.6%.
Both companies have Slovenian majority shareholders as Nova Lubljanska Banka owns 51% of the pension company capital of Macedonian NLB Tutunska Banka’s while Skupina Prva zavarovalniski which owns DD holds 51% of the pension company capital of Komercijalna Banka. (See earlier IPE article: EBRD-backed Slovenian giant goes east)
Asset allocation in the NLB fund at the end of July was 55% in domestic bonds, 31% in deposits, 7% in short-term domestic securities, 6% in domestic equity and 1% in foreign shares.
Within the KBP, asset allocation was set as 57% in domestic bonds, 31% in deposits, 5% in short-term domestic securities, 5% domestic shares and 1% receivables.
Total assets in the mandatory pensions sector at the end of July was MKD6.9bn (€110m) and the third pillar regime only consists of one pension fund which is run by NLB and has MKD118,000.
In its tender before setting up the mandatory system, the Macedonian government noted there will only be two licenses granted in the first 10 years. (See earlier IPE story: Macedonia issues pension fund management tender)
Since then workers who were aged between 25 and 40 at time of inception of the system have paid 7% of pension insurance contributions into the private pension funds.
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