ING invested around 66 million euros in order to gain the top position on the market of mandatory private pensions, a sum it expects to recoup in the next ten years.
The share of pension fund clients with empty accounts, namely those for whom employers do not transfer social security contributions, could go down to 10% in several years, from around 22% at present, considers Emilia Bunea, the new CEO of ING Pensii, the biggest company on the market of mandatory pensions (pillar II).
She considers the rising number of employees for whom employers transfer contributions will be due to the normal trend of the economy. In the latest contribution transfer round, employers paid social security for 3.38 million customers, from a total of 4.36 million. ING Pensii's CEO states these empty accounts generate inefficiency in the case of pension companies because of the additional management expenses.
ING has over 1.4 million customers for the mandatory pension fund it manages and for 19% of them employers have not transferred any contributions in the past month.
The largest part of the 66 million euros that were invested was spent on fees for marketing agents and in the advertising campaign carried out during the initial signing-up campaign. Emilia Bunea says that after the initial investment, sums needed to keep the business going will not be large ones. "Our strategy is focused on boosting market share and keeping the leading position". At present, ING accounts for one third of the mandatory pension market.
Total investments by pension managers are put at around 600 million euros.
ING has so far collected in contributions worth almost 54 million euros from customers and by yearend expects to reach assets worth 90m euros (312 million RON). "By yearend, we'll probably have 20,000 new customers and in each of the next years 70,000. This year's figures have significantly exceeded our expectations, probably because official estimates launched ahead of the campaign were more downbeat".
As regards the international financial crisis, ING's CEO considers it could have a short-term effect over the pension and life insurance market.
Bunea has recently replaced Radu Vasilescu at the helm of ING Pensii, after Vasilescu resigned to start his own business in the field of financial consulting services.
The new CEO of the biggest pension company on the market filled the CFO position with ING Asigurari de Viata and before was deputy CEO of Interamerican insurance company.
"It's a logical and nice road, I am highly motivated by this evolution. The move to ING is a challenge as this is the biggest company on the market," says Emilia Bunea.
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