Assets Owned by Pension Funds Grow by 9.5%

By 5 February 2018

ZAGREB, February 5, 2018 - The total assets of compulsory pension insurance funds at the end of 2017 amounted to 91.9 billion kuna, which is 9.5% or around 7.7 billion kuna more than at the end of 2016, it was said at a news conference held in Zagreb on Monday by the Association of Companies Managing Pension Funds and Pension Insurance Companies (UMFO).

UMFO president Damir Grbavac, who is also the management board chair of the Raiffeisen company managing compulsory and voluntary pension funds, said that the total assets of compulsory pension insurance funds accounted for 26% of gross GDP and that the 9.5% annual increase made Croatia the leader among countries in transition.

"An OECD survey shows that Croatian pension insurance funds are at the very top in terms of the real yield in European countries and have a higher average real yield than most OECD countries and funds in countries such as Austria, Belgium, the Netherlands, Canada or Switzerland," said Grbavac.

Grbavac believes that the year 2017 was marked by a satisfactory yield given the market conditions, notably the situation with the Agrokor corporation, which last year was taken over by emergency management due to its excessive debts.

The yield in the Category A pension funds was 4.57% in 2017, in the Category B pension funds, which have the most insurees, the yield was 3.06%, and in the Category C pension funds it was 6.08%. In the period from 2002, when compulsory pension funds were established, to the end of 2017, the average annual yield of all Category A pension funds was 8.95%, the Category B pension funds had a yield of 5.76%, and the Category C pension funds had a yield of 6.93%, it was said.

Grbavac said that on the last day of 2017 the funds had 1.84 million members, of whom 98% or 1.81 million were members of the Category B pension funds.

Grbavac said that, since they started operating, pension insurance companies had invested a significant portion of their revenues in Croatian companies and were still interested in investing in infrastructure projects as well as the energy sector, mentioning in that context the HEP power company.

The year 2017 was marked by the Agrokor crisis but pension funds have weathered it, which is proof of their good management, said Grbavac.