POLAND - Polish pension funds grew 20% over the last year - surpassing the PLN140bn (€39bn) mark - thanks to more money flowing in from the state social security fund ZUS as well as higher fees.

The ZUS which collects money for the mandatory second pillar from participants transferred PLN17.7bn into the 15 pension funds - 10% more than in 2006 - research company Analizy Online found in its latest market update.

Higher fees also contributed another 10% to the asset growth with revenues from this source amounting to PLN1.1bn.

With values of the Warsaw stock exchange index WIG only growing 10% compared to 40% in the previous year, managers had a tough task at hand reporting a 7% performance, down from 17% in 2006 which was the best year since the creation of the mandatory second pillar in 1999.

Nevertheless, they managed to beat the OFE benchmark which consists of WIG profitability (30%) and IROS, the index of benchmark treasury bonds.
The best performer regarding pension fund returns was Pekao (7.1%), offered in a joint venture by Bank Pekao and Pioneer Global Asset Management.

The PLN2.2bn fund saw its assets increase 21% despite outflows of PLN17m because of members transferring to other funds.

Axa's and Generali's funds also saw the highest number of new joiners, as assets increased by 27% and 26% respectively almost solely because of these transfers, analysts said.

The largest player in the market remains Aviva's PLN37bn Commercial Union fund with an asset increase of 20%.

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