CZECH REPUBLIC - The ten pension funds of the Czech Republic maintained fixed income-heavy portfolios in the first quarter of 2010, posting average returns of 2.28% over the three-month period.

Aegon was the only the fund not to make a return, posting 0%. Aegon reported 0% return in 2009 as well, but will be giving its members a 2.1% interest on their savings for 2009. (See earlier IPE-story: Czech funds see fresh growth in 2009)

"It is natural for a pension fund to post a loss in the first years of its operation. It is linked to costs, a significant part of which is not directly related to the volume of assets under management," Aegon stated. It is the youngest fund in the system, which started operations in 2007.

The best performers in Q1 2010 were Allianz (3.7%) and Generali (3.5%), followed by the largest fund Ceske Pojistovny (PFČP) with 1.7%.

Overall the Czech funds had reported a 6.16% return for 2009.

The average asset allocation remained the same for the start of 2010 with around 80% in bonds, just under 5% in equities, 1% in real estate and the balance in other credit instruments or liquidity.

Foreign investments of funds vary strongly in size, but both the best and the worst performers had not invested in foreign assets at all during the past 15 months. Generali significantly reduced its foreign holdings.

The new regulations in place since August last year which forbid employers to influence their employees' choice in the pension fund may have contributed to some movement in pension memberships. AXA, ING and PFČP all saw their membership decline from Q2 2009, while the others gained clients.

The overall assets in the system have now reached just over CZK203bn (€8bn), a sum that both the IMF as well as the OECD would like to see growing significantly over the next years. (See earlier IPE-stories: IMF maintains pension reform pressure on Czechs and Making pensions mandatory is vital to Czech Republic - OECD)