Mandatory Pension Funds' Assets Reach €17.7 Billion at End-2021

By 24 January 2022

ZAGREB, 24 Jan 2022 - The total assets managed by mandatory pension funds reached HRK 133 billion at the end of 2021, up by HRK 14 billion on the year, the UMFO association of pension funds  and pension insurance companies said on Monday, adding that pension funds have earned their insurees HRK 50.9 billion to date.

At the end of 2021, mandatory pension funds had 2,111,192 insurees, or 53,801 more than at the end of 2020.

Of them, 1,899,623 were in category B, which is for insurees in the middle of their career and has medium-risk investment; 150,266 were in category A, which is for younger insurees and has the highest investment risk; and 61,303 were in category C, for insurees who are about to retire and has the lowest investment risk.

Thanks to a recovery of the capital market, the average yield for category A insurees in 2021 was 13.52%, and 7.78% since its establishment, for category B it was 7.37%, and 5.51% since its establishment, and for category C it was 0.43%, and 4.48% since its establishment.

At the end of 2021, there were almost 67,000 more insurees in category A than the year before, the UMFO said, adding that this was due to the 2018 amendments to the law on mandatory pension funds as well as higher financial literacy.

The structure of mandatory pension funds' portfolio is diversifying, the UMFO said, with sovereign bonds accounting for 63.8% of the portfolios at the end of 2020 and for 57.7% at the end of last year.

Domestic shares accounted for 10.7% of the portfolios at the end of 2020 and for 12% at the end of 2021, while foreign companies' shares accounted for 9.2% of the portfolios, up by 17.7%.

At the end of last year, 397,253 citizens made voluntary pension contributions and the net assets totalled HRK 7.8 billion, up 15.8% on the end of 2020.

At the end of 2021, eight open voluntary pension funds were active in Croatia with 351,251 insurees as well as 20 closed funds with 46,002 insurees.

Among citizens with 11 to 20 years of service, 30.6% wish to save in the third pension pillar while 27.4% would like to invest in real estate.

As for citizens with less the ten years of service, 31% wish to invest in real estate and 23.3% in the third pillar, UMFO said, adding that only 5.1% of them would invest in securities and less than 10% would keep the money at home.

(€1 = HRK 7.5)