Mandatory private pensions will soon become the most accessible savings instrument, and the funds will most likely be medium risk, says Marius Floarea, the pensions and bancassurance manager of OTP.
Pension management funds that are part of a financial group in partnership with a bank will have a clear edge over other rivals operating on the private pension market, believes Marius Floarea.
Floarea is a pensions and bancassurance manager on the voluntary pensions segment (pillar III), at OTP Garancia, and is also the general manager of the new mandatory pensions company (pillar II), OTP Fond de Pensii.
OTP Garancia' is already a voluntary pension manager and is currently waiting for its OTP Strateg fund to be authorised to effectively start sales.
On pillar II, OTP Fond de Pensii is one of 13 companies on the waiting list for a mandatory pension management licence.
"A well-established financial system and a complete package of financial services is an advantage only banks have on the market of private pensions," says Marius Floarea. This particularly applies in the field of mandatory pensions, where in most cases the funds on offer will be similar, while distribution will be one of the factors making a difference.
Under the circumstances, banks' networks will provide a clear advantage in terms of pension product distribution, believes Floarea.
Despite the current legislation that prevents banks from selling mandatory pensions directly, the advantage of distribution that the banking network has can be exploited by setting up a pensions broker.
With this in mind, OTP intends to set up its own pension broker, thus utilising the banking network for the distribution of mandatory pensions, explains Floarea. According to company estimates, OTP targets a 10% share on the mandatory pensions market, which translates into around 25
