The high ambitions of mandatory private pension (pillar II) managers show in the large number of participation contracts sent to agents and brokers; a number likely to exceed 15 million for the entire market.
In order sign a customer, each fund will print and distribute no less than five participation agreements, explained several managers to ZF. Already, the number of contracts sent to companies' distribution channels (either their own sale agents, or pension brokers that represent several managers) has exceeded the announced market share targets several times.
Why are so many contracts (around 15 million) required for a market that is only estimated to have 3 million customers? Firstly, managers say, there is often a large amount of errors related to the filling in of these participation agreements, which is why the same paper often needs to be filled in several times by the same participant.
Secondly, many managers' own agents, and even some private pension brokers, overestimate their capacity to attract customers and ask for more participation agreements than the actual number of customers they can access.
The huge number of participation agreements released onto the market is further evidence of management companies' high ambitions. These ambitions also showed in the market share targets announced by each company.
Overall, the targets of the 17 companies managing mandatory pensions account for over 261% of the market. Only the 4 of the most ambitious players have announced targets above 30%.
The remaining majority announced targets between 10% and 15%, while only 2 companies set a market share target below 10%.
Recently, the increased fees paid to agents have indicated the ambitions of managers.
Before the sale campaign started, agents received, at the most, between 15 and 25 euros per contract, during the summer. However, some pension companies now pay their agents an average 20-30 euros per contract, whilst some managers have pay as much as 50 euros per contract if a customer earns a gross wage above a certain level.
Also, the number of sales agents witnessed a spectacular increase on the market and almost reached 200,000 earlier this week.
Six months ago, management companies estimated the total number of sale agents would revolve around 100,000.
Several thousand new employees are expected to enter the labour market each year and must join a mandatory fund. These individuals, as well as current employees aged between 35 and 45, who can opt for a mandatory pension, will be sales agents' new targets, after the initial four-month joining period ends.
High ambitions
The high ambitions of mandatory private pension (pillar II) managers show in the large number of participation contracts sent to agents and brokers, which is likely to exceed 15 million
Managers' high ambitions were visible in the market share targets announced by each company
The significantly higher fees agents receive from managers also indicates the ambitions of the market
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