One of the eight private pension firm CEOs who lost or gave up their positions less than one year since the start of the system has agreed to speak to ZF about the reasons behind his departure and about the huge amount of pressure a pension CEO faces each day.
"Executives are the ones legally responsible for the company's actions and laws and norms in the field of private pensions come with very harsh penalties, in some cases a seven years' prison sentence. In addition, because of the combination of legal responsibility and an almost complete lack of control over the company's operations, the position of CEO at a private pension firm is very hard to keep," maintains the former CEO, who chose to remain anonymous.
He states that it is shareholders that make the rules inside the company, while CEOs do not have control over decisions and operations, but are legally responsible for them. There is huge pressure from shareholders, who want to recoup the around 600m-euro investments they made in these companies within a reasonable period of time.
Besides this, the private pension market is highly regulated and penalties imposed on companies and their heads by the supervisory authority can be very tough.
For instance, ING was recently fined 382,000 euros by the Private Pension Supervisory Commission for having breached legislation in the field.
"If anything goes wrong in terms of operations, marketing or the financial side, the CEO is the first to be fined or imprisoned, irrespective of whether they had anything to do with the offence. I wouldn't be surprised to see further pension firm CEOs relinquish their positions when they come to realise this," the former CEO says.
Private pensions are said to be one of the most lucrative businesses of the future, with the value of potential funds under management to revolve around billions of euros.
The funds' battle for the customers will be extremely tough, and the position of CEO at a private firm actually disguises a big threat, says the former manager. "Most pension firm heads are caught in a trap because they do not have any real authority in their organisations (...)," adds the former CEO.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
