The 17 already licensed mandatory private pension funds (pillar II) could be the only ones that will operate on the market and their race for the 3 million customers has already started
The mandatory private pension products are all very similar, however, several funds have attempted to differentiate their offers through certain features. For instance, Aripi fund, managed by Generali Pensii, is the only fund with a high-risk profile, while the other funds have medium-risk profiles, according to the classifications drawn up by the Commission for the Supervision of the Private Pension System (CSSPP).
The 16 medium-risk funds generally invest between 65% and 75% of customers' assets in instruments deemed as secure: i.e. government bonds (with a higher weight in Romanian and European Economic Area bonds and lower weight for bonds issued by the US, Canada and Japan), as well as bonds issued by international financial institutions (EBRD, EIB, IMF, World Bank). However, the exception is Aripi fund, which only invests 55% of customers' assets in such instruments.
Medium-risk funds invest between 15% and 25% in listed shares (the riskiest asset in the portfolio), while Generali's fund invests 36% of customers' assets in shares listed on various markets. The exception is AIG fund, which stated from the very start that it would invest a portion of assets (10%) in shares listed on foreign stock markets, as well as 5% on the domestic stock exchange. All the other funds stated they would buy shares listed "in Romania or the European Economic Area". In extreme cases, the weight of investments in instruments deemed secure can reach 90% (85% in the case of Generali fund), while the weight of investments in listed shares can reach 35%.
In terms of fees, there are 4 that influence the value of contributors' personal assets. The first is the initial management fee (2.5%), levied on transferred contributions and is the same for all the funds. The second is a permanent management fee, which is deducted from the personal asset and stands at 0.05% per month for 16 of the 17 funds. The only exception is Alfa fund managed by AG2R, which charges a 0.045% fee. Another 2 firms offer a promotion, Aviva and Interamerican. The third important fee concerns the audit, levied on the overall asset of the fund at the end of each year. The fund managers have negotiated different audit fees with the auditors. The fourth fee is levied only if a participant transfers his or her account to another fund within the first 2 years.
Another similarity of all 17 funds is the initial value of the fund unit (10 RON). As a result, because all the funds will start to collect contributions at the same time, anyone will find it easy to compare the yields at any time.
Another difference that separates the funds is that the managers have chosen different depository banks and financial auditors.
Differences among funds
Aripi fund managed by Generali is the only fund with a high-risk profile
Aripi invests just 55% of assets in instruments deemed as secure
AIG fund is the only fund to state from the very start that it would invest a portion of assets in shares listed on foreign stock markets, and 5% on the domestic stock exchange
Alfa fund's (managed by AG2R) permanent management fee is 10% lower than the rest of funds
AG2R fund levies a fee of 3.5% for the transfer of personal assets within the first 2 years
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