The latest annual returns from the BAV, the insurance supervisory office, for Pensionskassen (PK), from which we have extracted the figures for our regular table below give no indication as to the new lease of life the PK is undergoing as a pensions vehicle, thanks to the Riester reforms.
The figures themselves refer to 2000, when the total number of PKs came to 139, down from the 141 the previous year. But the key feature was that the total assets of the fund in 50th position in the table had DM413m (e211m) in assets, while the fund in 100th position had just DM62m.
We are dealing here with assets at book value, reflecting the price at which assets were acquired, since PKs have, because of their non-commercial and private nature not had to put their assets onto a market value basis.
Judging by some of new development where the flexibility of PKs is being recognised by the marketers with financial services groups and they are being used as asset-gathering vehicles, albeit for pension purposes, on a commercial basis. The need for greater transparency becomes obvious and the assets should be put on a market value basis, as they have been for the insurance industry.
With the fall in many equity values below the original purchase price it becomes even more important to know exactly what the asset base is and that it is not being hidden. In the past decade or so, the hidden reserves of PKs were there to protect returns and could be released as and when required. Losses sadly do not have the same favourable characteristics.
Nonetheless, the total invested assets of the sector grew on this book value basis during 2000 and year end came to DM139bn, compared to DM132bn in 1999. The invested assets were DM135bn, compared withDM128bn.
The number of active members covered through PKs was maintained at 2.38m, while the nimbert of pensioners and those being covered for incapacity rose to just over 1,040m, up steeply from the total of 894,000 of the previous year. This probably reflects the maturing age profile of those who are members of these schemes.
The figures for current yields obtained by PKs on their assets averaged 6.5% down from 6.6% the year before. This figure has to be treated with caution, as it is calculated on the book value of investments, but it is also to a degree at the discretion of each PK as to how much of the hidden reserves it decides to take into the accounts of the fund.

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