POLAND - The Polish government is working on a reform of the second pillar, which would see the end of sales agents working for pension funds, IPE understands.
The Polish supervisor had recently cited the presence of sales agents as one of the problems of the mandatory second pillar. (See earlier IPE article: Polish second pillar in need of ‘fine tuning')
Discussions have been going on for a year, but according to a market expert the new law might be in place no later than at year-end 2010.
Instead of using sales agents, pension funds would be offered via the internet and possibly by telephone, should the law come into effect. The expert described pension providers' current strategies a "sales war".
So far, among the heaviest users of sales agents are AXA and ING, which, according to as yet unconfirmed information, overtook Aviva in asset volume by the end of August.
At end-June 2009, ING had close to PLN37bn (€9bn) in assets under management and Aviva just over PLN39bn, according to figures released by the research company Analizy.
Another part of the planned reform is the method to assign those who do not make an active choice. Currently they are shifted to the better performing fund twice a year but the interval is expected to be four times in future.
Meanwhile, plans on the introduction of a life-cycle model, already mentioned in March, this year appear to be taking shape. (See earlier IPE article: Polish gov't to slash pension fund contribution)
The expert in the market notes that each pension fund company will have to manage two types of funds - not three as in other life-cycle models.
The second fund to be offered will be a bond-only portfolio with last year's inflation as the benchmark, the expert said. "After the market turmoil ‘guarantee' is a key word in the clients' and voters' minds and everybody is talking about it," he added.
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