The value of assets managed by Poland's 13 mandatory open pension funds (OFEs) decreased in December by 2.1% y/y (or PLN 6.5bn) m/m to PLN 299.27bn (EUR 71.8bn) at the end of the month, according to calculations of Analizy Online, which monitors the investment and pension fund market. In the entire 2013, these assets grew by nearly PLN 30bn, or 11% y/y.
In December, their value dropped due to the bearish sentiment on the equity markets: it was the worst December since 1994, analysts explained. Last month, the Warsaw bourse's widest index WIG lost 6.3% on the month, while blue-chip index WIG20 lost 7.1%.
In the entire year, though, the beginning of the economic revival pushed equity prices upwards: WIG gained 8.1%, but WIG20 lost 1.8%; however, the main beneficiaries were small- and mid-caps - their indexes grew by 37.3% and 31.1%, respectively.
Meanwhile, transfers of old-age contributions from the Social Security Board (ZUS) totalled PLN 0.8bn last month and PLN 10.5bn ytd.
It is worthwhile to recall that according to the recently passed legal changes, the pension funds will have to send 51.5% of their assets (calculated as on Jan 31 of 2014) to the Social Security Board (ZUS), where they will be written off. Thus, Poland's public debt will be cut by PLN 120-140bn (according to various estimates).
Poles will have four months after the changes take effect (instead of previously proposes three-month period) to choose whether they want to transfer their old-age pension contribution (proposed at 2.92% of gross wages vs. current 19.52%) to the fund or ZUS. If they make no decision, they will be transferred to ZUS by default.