Pension funds raise client numbers by 569,000 to 5.13m in 2012

Prague, Feb 22 (CTK) - Pension funds in the Czech Republic had 5.13 million clients last year, 569,000 more than in 2011, and the number of newly signed private pension insurance policies grew by 671,000 to 1.13 million, according to Finance Ministry statistics.

The growth in the number of the newly signed contracts is related to the pension reform which came into force in January 2013.

"The significant increase in the number of new private pension insurance policies came mainly thanks to higher interest in private pension insurance at the close of the year. It was possible to sign new private pension insurance contracts only till November 30, 2012," the ministry said.

Private pension insurance with state contribution was replaced by supplemental pension savings as of 2013.

"In 2012, people started to be interested a lot in information concerning their pension. Client interest in private pension insurance was extreme last year and was growing constantly with the approaching end of the year," Broker Consulting analyst Jan Lener told CTK.

As regards financial planning, with private pension insurance people could not go wrong. They can now switch to the new product any time, he added.

With the higher number of private pension contracts, the volume of state contributions to clients grew as well - by Kc311m year on year to Kc5.91bn last year.

The total volume of client payments without the contribution of employers rose by Kc2bn to Kc25.5bn.

At the end of 2012, the average payment per month reached Kc464.95, compared with Kc441.65 at end-2011.

Experts attribute the increase to the changes in the payment of state contributions. Everyone saving at least Kc100 a month was entitled to the contribution earlier, while as of January 2013 only those saving Kc300 a month or more can gain it.

The number of private pension insurance policies with employer contributions grew by 3.6 percent to 1.32 million against end-2011. State contribution is not provided for the contribution paid by the employer.

Private pension schemes with state contributions were introduced in the Czech Republic in 1994. The number of pension funds on the market has fallen from 44 to nine since then. All will take part in the pension reform but some only in the transformation of the current private pension insurance.

Number of pension funds' clients:

Year Number (in millions)
2000 2.37
2001 2.53
2002 2.62
2003 2.74
2004 2.96
2005 3.28
2006 3.59
2007 3.94
2008 4.21
2009 4,39
2010 4.53
2011 4.57
2012 5.13

Source: Finance Ministry