Polish pension funds invest EUR 28.8bn in WSE-listed stocks in 2013

By bne IntelliNews May 12, 2014

The value of investments of Poland's 13 private-held open pension funds (OFEs) in companies listed on the Warsaw Stock Exchange (WSE) increased by 29.7% y/y to PLN 120.3bn in 2013, according to the data of national stats office GUS. At that time, investments abroad were worth of PLN 4.3bn, or 1.3% of their investment portfolio (vs. the legal limit of 5.0%).

Of the domestic equity investments, PLN 54.9bn was earmarked for the financial sector companies, PLN 32.8bn - for industrial stocks and PLN 32.6bn - for services and utilities companies, GUS also reported.

OFEs' net assets rose by 11.0% y/y to PLN 299.3bn at the end of 2013. Last year, the Social Security Board (ZUS) transferred PLN 10.8bn worth of old-age pension contributions (uop by PLN 2.5bn on the year) and PLN 0.2bn in interest payments to the funds. Since the launch of the pension reform in 1999 till the end of 2013, ZUS has transferred PLN 195.1bn worth of contributions and PLN 3.5bn in interest payments.

OFEs's financial result dropped by 46.8% y/y to PLN 19.92bn last year, while net earnings of the firms that manage the funds - PTEs was down by 49.6% y/y to PLN 360.7mn, the stats office also announced.

In early 2014, the government carried out changes to the OFE system. The most substantial amendment, at least in the short term, is the transfer to the publicly-run pay-as-you-go pillar (PAYG) of 51.5% of financial assets held by OFEs, which took place in February of 2014. OFEs have been financed by a portion of gross wage contributions, which they used to accumulate financial assets. Other changes include making future contributions to OFEs optional rather than mandatory and the transfer to the PAYG system of all funds 10 years before retirement.

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