ROMANIA - Funds in the Romanian mandatory second pillar reported an average return of 6.97% for the first half of 2009, and there are further consolidations in the pipeline.

Year-on-year the funds managed a return of 13.47%, the Romanian pension fund association APAPR told IPE, and the annualised return since their inception in March 2008 is 12.84%, not taking into account inflation of 5.77%.

Official figures from the supervisor CSSPP on pension fund returns will only be available next year, which is two years after inception, a spokesman for the supervisor confirmed.

Both the APAPR and the CSSPP noted that the return was mostly down to high yields on fixed income investments, both government papers and corporate bonds.

Meanwhile, the supervisor has given green light to two mergers in the system finalising the Eureko-Bancpost and the BCR-Omniforte (administered by Omniasig) deal. (See earlier IPE article: Eureko rebrands Romanian division)   

However, further mergers have already been filed with the CSSPP, said Mihai Bobocea, secretary general of the APAPR: merger of "BCR-OTP and Eureko-KD". (See earlier IPE article: Consolidation stage set in Romania)

"In the near future we also expect the ‘Prima Pensie' fund to merge, so that only nine funds will be left on the market this time next year, as against 18 funds that started on the market two years ago," he noted.

Ion Giurescu, the CSSPP's vice president, has also hinted "that only nine players could be left in the market after further consolidation," the APAPR spokesman confirmed.

Given the ongoing mergers, statistics on funds' asset growth were distorted by the fusions, especially as during a merger of two funds participants can switch to any other fund free of charge

Assets in the funds grew 9.49% on average over the last month to RON1.6bn (€380m).

The CSSPP also confirmed that it will "finish the project of the Private Pension Guarantee Fund (together with the Ministry of Labour) by the end of the month: adding "we hope that this project will be adopted by the Romanian Parliament by the end of this year." (See earlier IPE story: Romania to look at pension reserve fund and life-cycling)

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