Pension funds contribute 20% to CEE wealth increase
EUROPE - Pension funds in Central and Eastern European (CEE) aided a 14% wealth increase for people in the region, a UniCredit study has found.
People in Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovenia, Slovakia and Turkey have seen their personal wealth increase to €583m over the last year according to UniCredit's "CEE Households' Wealth and Debt Monitor".
At least 20% of this wealth increase is related to pension fund contributions.
"Pension funds remain the most interesting and fastest growing part of the wealth," commented Debora Revoltella, chief economist for the CEE region at Bank Austria-Creditanstalt, an Austrian subsidiary of UniCredit.
Assets in pension funds are now thought to make up 9% of households' financial wealth in the region.
The study also found demand for life insurance products increased more than the average wage in countries where the pension system is not yet fully reformed.
These countries include Romania, where the second pillar will start collecting money from next year, Slovenia, Turkey and to a lesser extent the Czech Republic, where third pillar provisions have been in place for several years now.
In Poland, 82.8% of the workforce are already contributing to a second pillar provision, followed by Bulgaria with 76.4%, Croatia with 75.1% and Hungary with 67.5%.
Poland and Hungary were the first in the region to initiate privately-managed compulsory pension savings schemes starting in 1999 and 1998 respectively while Bulgaria and Croatia followed in 2002.