Mandatory private pension companies (pillar II), initially touted as the business of the next decade, ended last year with overall losses worth almost 50 million euros (164.8 million RON), according to the annual report of the Private Pension System Supervision Commission (CSSPP).
Each of the 18 private pension fund mangers operated at a loss last year in the wake of massive spending and because firms did not derive any revenue, with contributions set to start as late as the end of this month.
The highest losses were posted by Interamerican Fond de Pensii (about 8.8 million euros), ING Fond de Pensii (8.6 million euros) and Allianz-Tiriac Pensii Private (5.6 million euros).
"The year 2007, when pillar II launched operations with the initial signup, was marked by large operating expenses (marketing, advertising, IT systems and salary spending) and low revenues, which led to losses for all of the 18 managers," the CSSPP report reveals.
Most pension managers spent money during the four-month signup campaign, which lasted from mid-September last year to mid-January this year, when funds paid advertising costs and fees to their brokers.
According to the CSSPP report, the legal entities that served as marketing agents collected 56 million euros (188.8 million RON) from commissions, while advertising costs stood at some 20 million euros, according to estimates made by market players.
However, losses are not directly proportionate to the number of clients attracted, given that Interamerican, although fifth on the market, posted the highest losses. The fund has about 264,000 contributors.
As far as ING Fond de Pensii is concerned, the losses reflect the number of clients attracted: 1.38 million; this is the market leader.
The same goes for Allianz-Tiriac, which posted 5.6 million euro losses, but is the second-leading manager on
