Private pension funds keep secret the names of companies they invest in

Making portfolios transparent would increase the level of financial education and would make contributors less reluctant to invest their savings elsewhere other than in banks.

Almost three years after the launch of the mandatory private pensions scheme, the so-called 2nd pillar, had over 470 million RON (110 million euros) in investments in equity and 500 million RON (118 million euros) in investments in corporate bonds. In total, private pension funds have nearly 1 billion euros in assets under management and five million contributors. Each employee is bound to contribute 2.5% of their gross salary to a voluntary pension fund.
Pension managers do not, however, publish the detailed structure of investments, so contributors are not informed periodically as to where their contributions are invested and that they are indirectly shareholders or creditors of a company listed on the Bucharest Stock Exchange or abroad, or that they financed the Romanian state when the funds bought T-bills.
"When it comes to investments, transparence equals safety. When an investment fund publishes its investment structure, investors can see what the medium and long-term yield prospects are. At present, participants to the private pension schemes can choose their pension fund based on the yield and the reputation of the fund manager, and less based on investment structure information. On the other hand, it is understandable why pension managers would decline to reveal the detailed structure of investments because each of them wants to retain their edge over competitors," said Mihai Chişu, broker at IFB Finwest.
On the other hand, the Romanian capital market complains about the significant lack of interest from investors and about the low amounts being traded, with some funds investing on foreign markets, saying they do not have enough investment alternatives on the Romanian market.
"Pension managers send to the Commission the structure of investment portfolios every month and the Commission has the mission to intervene if it notices irregularities with pension portfolios. Participants can request information about their portfolio on an individual basis. We don't believe it is necessary for portfolio details to be made public because of fears that investment strategies may be copied from one manager to another. But we will take into consideration the suggestion that the annual report published by private pension managers should contain the detailed structure of investments," said Mircea Oancea, chairman of the Private Pensions Supervisory Commission (CSSPP).