On the other hand, the revenue of the seven managers that invest 3.75% of the gross monthly income of 7.63 million employees into the Pillar II pension funds, rose 58.3% to RON441.3 million, Finance Ministry data show.
“In 2020, the revenue as a percentage of the assets stood at about 0.6% to 0.7%, which shows the level of fees charged in the last few years, less than 0.7% a year. The people contributing to pension funds are now getting lower fees than a few years ago. The legislative changes made two years ago slashed fees, which benefits contributors,” Cristian Teodorescu, financial consultant and cofounder of Investors Club, told ZF.
He says some of the pension fund managers do not have sufficient volumes to break even, although they generated yields for their contributors.
“The pension fund management market is in the red in 2020, as well. In other words, even though the seven managers delivered yields of more than 6% per year for investors, some of them do not have sufficient volumes to allow them to break even. A few years ago, most pension fund managers projected a shift to profit around 2020, but the slashing of the fees of the entire market pushed this moment back.”
According to the data supplied by pension fund managers, the seven Pillar II mandatory private pension funds, to which 7.6 million employees contribute, generated 6.2% yield on average in 2020, three times the inflation rate or EUR900 million (RON4.4 billion).
(English version by Loredana Fratila-Cristescu)