Pension funds (PTE PZU)

Market situation

At the end of 2017, the net asset value of open-end pension funds was nearly PLN 180 billion, up 17.0% with respect to the end of the previous year.

PTE PZU activity

The PZU Złota Jesień Open-End Pension Fund managed by PTE PZU (PTE PZU) is one of the largest players on the pension fund market in Poland. At the end of 2017, OFE PZU was the third largest pension fund, both in terms of the number of members, as well as in terms of net asset value:

• the fund had 2,134 thousand members, or 13.3% of all participants in open-end pension funds;
• net assets accounted for over PLN 23 billion, representing 13.0% of the total asset value of open-end pension funds operating in Poland.

During 2017, the Social Insurance Institution transferred to OFE PZU PLN 315 million in premiums, which was 5% more than in the previous year.

At the end of 2017, PZU’s Voluntary Pension Fund kept 59 thousand individual pension security accounts (IKZEs) in which nearly PLN 46 million worth of assets was accumulated. As a result, the fund maintained a leading position in the voluntary pension funds segment. The rate of return generated in 2017 was 14.7%.

Open-end Pension Funds - percentage of net asset value as at 31 December 2017 (%)

Source: PFSA, monthly data on the OFE market, Data for December 2017

Factors, including threats and risks, which will affect the pension funds’ operations in 2018

The main challenges facing the pension fund market in 2018 are the following:

• the economic climate on the capital market and, in particular on the Warsaw Stock Exchange, affecting the value of assets of the funds and the level of fees collected by pension fund companies for management;
• pension system reform and results of the statutory review of the pension system and associated legal risk, in particular the assumed transfer of 75% of the funds from OFE to newly created IRA/IRSA and 25% of the funds from OFE to the Demographic Reserve Fund;
• preparation of pension fund companies for organizational and legal changes arising from transformation of open-end pension funds into mutual funds, and the companies into mutual fund companies;
• opportunities arising from the achievement of the objectives specified in the Capital Formation Plan and the Responsible Development Strategy the pursuit of which will depend on the development of detailed solutions and the entry into force of necessary legislative changes;
• active participation in work on the adoption of solutions enhancing the performance of the third pillar and making it more attractive, and influencing the need in public awareness for accumulating additional savings for future retirement.