POLAND - Polish pension funds rose in value by 5.7% last month, following improved performance for the second consecutive month in a row along with fresh cash contributions from the government - the first to be made since 2003.

Information presented by consultancy firm Analizy reveals pension funds grew by PLN7.8bn (€1.74bn) in April, through a combination of returns and contributions, and lifted the collective value of pension funds to PLN145bn.

A key part of that growth was PLN1.1bn in cash contributions from ZUS, the Polish social security system. Between 2002 and 2009, the Polish government instead made back-dated contributions to schemes in the form of restructuring bonds issued by the Ministry of Finance, to cover shortfalls between 1999 and 2002

Record monthly investment returns added PLN6.8bn to the value of funds, thanks largely to the record monthly growth of 19% on the Warsaw Stock Exchange, and all funds generated a positive return of over 4%.

OFE Polsat was able to make the best of this and returned 7.1% over April, though Analizy noted Polsat is likely to do well in bullish equities activity because it has a 37.6% allocation to the sector and records “good assets performance when stock markets do well, and even though it is the smallest fund in the market.

ING OFE also presented a 6.2% returned - important given it has the second-largest market share with 24% of assets invested - closely followed by General OFE with a  6.1% return.

At the end of the spectrum, the lowest return came from Allianz OFE though it still delivered 4.7% on investments, partly because it has just 18.4% of its assets in equities, followed by gains at Pekao OFE with 4.8% and Aegon OFE with 4.9%.

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